Prices a Bit Softer; Most Points Near or Above Index
The majority of cash points were down a few cents Thursday but
still sticking around in the vicinity of index levels. Despite some
negative influences, the California market even managed to maintain
at least a nickel premium to index. Even with a huge swath of rain
having a cooling effect on the Midwest and Northeast market areas,
heat remained the big reason for only a modestly softer
aftermarket. A screen drop of almost 9 cents had little impact on
A Chicago trader quoting citygates around $2.30 said it was a
quiet day because a lot of people had already done swing deals
through July 6. Other sources also reported light activity. Early
on prices were off in the Northeast, a marketer said, but later a
few buyers showed up short and generated a small rebound.
A System Underrun Limitation extension by Northern Natural Gas
(see Transportation Notes) was not causing any problem yet, said a
trader quoting demarc prices flat to a penny or so down in the low
$2.20s. However, since the SUL will last at least through Sunday,
problems could surface today, he said.
California was a strange market in bucking logical tendencies, a
couple of sources agreed. Even with a cooling trend starting in the
Golden State, an OFO-like Overnominations Day limiting deliveries
into the Southern California Gas system and Pacific Gas &
Electric continuing to project excess linepack through Sunday,
prices remained a nickel or more above index at all three major
pricing points (Malin, PG&E citygate and Southern California
border). One trader didn't believe the PG&E linepack warning
was serious because a pigging operation starting today on PG&E
Gas Transmission-Northwest will limit deliveries at Malin, he said.
Meanwhile SoCal Gas was riling at least one marketer, who said
the giant LDC gave no advance warning of the OFO and then came out
and bought gas itself at lower prices after news of the OFO got
around. Pretty much all of the day's trading had already occurred
by then, "so what you got was pre-OFO quotes," she told Daily GPI.
Instead of penalties, SoCal just buys any overdelivered gas from
the offending party, she said, recalling that a purchase price of
88 cents/Mcf was in effect during an April OD.
Based on weather forecasts, "I don't think people will want to
go home [today] in short positions," a Midcontinent trader said.
For that reason he saw good chance for moderate firmness in weekend
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