Market Slide Comes to End With Modest Upturn
The moderate price slide that defined much of the cash market
since late last week reached a plateau Tuesday as flat to slightly
higher pricing dominated reports. The correlation of cash movement
with a tight-ranged screen was very high, sources said. A gradual
warming trend was just starting to be felt in the major market
areas of the Midwest and Northeast, they added, but it was lending
support to small price increases at citygates and in the Gulf Coast
and Midcontinent regions.
All points were near their highs at the end of the trading
session, according to a Gulf/Appalachian marketer. That was
definitely due to a short supply squeeze developing as Northeast
buyers got more active, he commented. The marketer said he could
detect by the pattern of buying that some nuclear plants in the
market area are underperforming. However, he noted, until now the
utilities mostly have been rewarded over the last week by waiting
for higher prices.
One trader believed South Texas prices into Texas Eastern were
strong and keeping pace with many non-premium Louisiana points
because of Line 41 in the pipe's West Louisiana pool being out of
service through Sunday. In a related South Texas note, a marketer
said a pig stuck in the pipeline was restricting deliveries from
Channel and HPL into Florida Gas Transmission-Zone 1. "We just
missed getting cut [Tuesday], but have already told we will be cut
[Wednesday]," she said.
Power generation load remains somewhat depressed in much of
Texas, a Houston-based trader said. "It's just not hot anywhere
with all these thunderstorms," he added.
Oklahoma intrastate prices are starting to see a premium to
neighboring interstates because Oklahoma Gas & Electric has
been a significant buyer in the last several days after losing a
coal plant in a tornado recently, a Midcontinent source said.
A marketer was unsure what market impact a Transwestern
cessation of California border deliveries at Topock (see
Transportation Notes) starting Friday might have but thought it
likely would be "little to none" over the low-demand weekend.
However, because the outage will constrain 400 MMcf/d at the border
through the end of the month, she saw a chance of it boosting
prices next Monday and Tuesday for El Paso border deliveries and in
the Rockies and western Canada.
A Calgary trader reported seeing a "lot of apathy" for the July
market so far; "to us, most people are bearish" because of
forecasts for cooler weather in the Pacific Northwest early next
One aggregator reported doing July basis deals Tuesday at plus
10.75-11 for Columbia/Appalachia and plus 17.75-18.25 for Texas
Eastern M-3. However, he was starting to "wonder what people are
going to do with gas for the first six days of July with all the
holiday-related plant closings." That may be a good argument for
postponing most baseload until after the July Fourth holiday
weekend, he said.
A couple of sources, one in the Gulf Coast and the other in the
Midcontinent, agreed that index premiums for July essentially no
longer exist, with the Gulf trader remarking, "They are
disappearing right in front of my eyes." Last week almost the
entire Gulf Coast market was being talked up at index plus
0.25-0.5, she said. "Now you are hearing index flat or index
minus." That is forcing some sellers to think seriously about
taking their chances with the aftermarket, she said. The
Midcontinent source said brokers were making offers at index minus
0.75. Bidweek is shaping up to be a real "test of nerves," he
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