East Softer; West Sees Another Big Price Recovery
Eastern markets emerged from the weekend without seeing any
rebound from Friday's slump. Prices continued to decline by mostly
small amounts, with various points ranging from flat to just over a
nickel lower. A small futures drop contributed to the cash
bearishness, traders said, but more than anything else it was a
relative dearth of air conditioning load that sent prices down.
The softness tended to be more pronounced in the Gulf Coast than
in the Midcontinent. That was because heavy rain is causing rather
un-summerish mild conditions in the Southeast, and Gulf prices are
getting pinched by the lesser demand from Southern electric
utilities than usually prevails around this time of year, a
Meanwhile, it was like dj
vu all over again out West as for
the second straight week prices followed a Friday of big decreases
with a Monday of strong recovery. Both Southern California Gas and
Pacific Gas & Electric had ended their high-inventory OFOs over
the weekend, and hot weather kept power generation load for gas
high, a marketer said. San Juan Basin prices were especially
strong, rising nearly 20 cents to the mid $2.00s, largely due to a
maintenance outage of the Chaco (NM) Plant begun Monday by El Paso
Field Services. That is keeping an estimated 450 MMcf/d-plus off
the market through today, the marketer said; then the curtailment
is expected to decrease gradually until the Chaco work is completed
toward the end of this week.
One trader saw Kern River-Opal numbers rise from $1.94 to $2.00
as the morning proceeded, citing minor maintenance in the Opal area
as pushing the uptick. However, a lot of supply showed up in late
trading and caused Opal to retreat a bit to $1.98, he said.
Tennessee Line 500 fell very short at the end, according to a
staffer of a large Gulf Coast aggregator. She was mildly surprised
to see Tennessee trade a couple of cents above her Texas
Eastern-East Louisiana deals at $2.03-05; usually it's Tetco that
commands the premium, she said. The market seems pretty weak right
now, said a Gulf Coast producer, but he sees higher pricing ahead.
Gas futures seemed to have some upward momentum in Monday evening's
Access trading, he said, and crude oil futures continue to hang
around at just under $20/bbl. In addition, demand will pick up
strongly when rain ends in the Southeast and the region returns to
more normal sweltering temperatures, the producer predicted.
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