General Market Gains About a Nickel; West Weakest
Despite flatness at a few mostly western points, the overall
market pushed higher by around a nickel or so Tuesday. Electric
generation stresses had faded in the Northeast, but early screen
support and rising air conditioning load in the South-and to a
milder extent in the Midwest-combined for the cash gains.
Though August futures eventually settled at a small loss for the
day (and continued lower in Access activity), their higher position
while cash was still trading was enough to give some boost to
physical gas, several sources said.
The screen's late retreat was prompted by a drastic plunge of
more than a dollar in crude oil futures, which could signal that
fuel oil prices may become competitive at the burnertip with gas
again in the near future. The crude nosedive was caused by the head
of Petroleos de Venezuela SA suggesting that if oil rose to
$22/bbl, OPEC nations might abandon its production limits, a source
told Daily GPI.
A marketer said he thought physical traders felt good enough
about their storage positions to shrug off the moderating Northeast
weather. They were ready to interrupt injections to satisfy
Monday's heat-driven demand, the marketer continued. When there
were no significant turnbacks of gas at Louisiana points Tuesday,
he said, "that tells me the slacked-off air conditioning load from
the Northeast was being replaced by renewed injections."
One trader expressed surprise at tight Gulf Coast and
Appalachian ranges in the midst of substantial price increases.
Because of its relationship to higher Gulf Coast pricing, Waha
put a little distance between itself and mostly stagnant Southern
California numbers, a marketer said.
A couple of Calgary traders reported intra-Alberta deals for
August being done at C$2.74-75, approximately the same level as
Tuesday's day trading. However, both July swing and August baseload
were softening by about a penny later on, they said.
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