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Eastern Points Follow Screen Lower; Warm West Flat

Eastern Points Follow Screen Lower; Warm West Flat

The cash market finally broke free from the doldrums that had becalmed much of it earlier this week and found a direction in which to move Thursday-mostly down a few cents in the East. Sources cited the decline in the Henry Hub futures contract for July as the main reason for eastern cash drops that ranged up to a nickel or so. However, continued warm to hot weather kept air conditioners humming in the West, and the resultant power generation load for gas rendered most of the region's trading points resistant to the general softness. Western quotes tended to be flat to up a penny.

Wednesday afternoon's AGA storage report seemed kind of bullish since the figure of 63 Bcf in injections fell well short of most expectations, a Gulf Coast producer said, but cash apparently was not reacting that way Thursday.

Power prices were rising in the West and that helped support gas prices, according to an Oklahoma source. San Juan Basin numbers took a little dip in the middle of trading and then came back up near the end, he said, while Southern California border quotes remained strong all the way.

Intra-Alberta pricing fell slightly to C$2.79-80 despite a NOVA pigging operation that is keeping more than 800 MMcf/d off the market through next Wednesday, a Calgary marketer said. He figured prices would be down to the low to mid C$2.70s if it hadn't been for the supply cut. But intra-Alberta numbers are stuck in a rut right now with little in the way of weather to influence them either up or down, he said. The Alberta market was quieter than usual due to a NOVA golf tournament, he added.

A Midcontinent trader considered himself lucky after selling into NGPL-TexOk at $2.21 and ANR-Southwest at $2.16 early when prices were relatively flat. "When they dropped later, we were able to backfill," he said. He expects most Midcontinent pipes to fall into the mid $2.00s today due to mild weather and the usual weekend demand slump. But prices should be recovering around next Wednesday when temperatures are forecast to be in the 90s, he said.

The same Midcontinent trader said the storage report had little effect on the market "because I think we're on a pace where the storage situation justifies the prices. We're right where we should be [on storage injections]."

July physical basis quotes narrowed Thursday in sympathy with the screen's softness, a Texas marketer said. She reported basis talk of minus 6-6.5 for both ANR-Southeast and Texas Eastern's East Louisiana zone. Basis is minus 9.5-10 for Texas Eastern's South Texas zone, she said.

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