Fundamentals, Screen Keep Cash Quotes Rising
Cash prices built further Tuesday on their early-week gains in
virtually every market except Northern California. Factors behind
the firmness remained much the same as on Monday: a moderate screen
increase, a "stash it while you can" storage mentality and a
gradual warming trend in northern market areas. Price movement
ranged from flat on several Rockies pipes to about a nickel higher
at many Gulf Coast and Midcontinent points.
"It's getting hot again," observed a Midcontinent marketer
reporting heavy power generation load on the Williams system.
A Gulf Coast source was in agreement, adding that recent nuclear
plant outages in Louisiana and Texas have been worth almost 800
MMcf/d in regional gas load. Quite a few utilities are behind on
their storage injection schedules and are using the relative lull
from last month's intense heat waves in an attempt to catch up, he
said. For that reason, besides keeping demand for swing gas high,
the utilities are keeping their takes of indexed baseload gas at
maximum levels, he added.
Heavy air conditioning load in Texas had Waha trading just 2-3
cents below Katy, while Houston Ship Channel deliveries commanded a
premium of almost a nickel above Henry Hub. Most Waha gas was going
to either the Midcontinent or North Texas area because the
transport economics to Katy didn't work, a marketer said.
One Southeast trader sees little chance for prices to get much
higher than they are now. "As far as real demand goes, there is no
doubt in my mind that last week turned out better than this week
will," he said. "There aren't as many end-users buying gas as there
were a week ago. I'd say the ratio is 3:1 sellers to buyers."
Malin and the PG&E citygate were Tuesday's rare weaker
points. There's just not as much cooling load in Northern
California as there is to the south, said a marketer who pointed
out that his purchases into the PG&E system at the Southern
California border had widened to nearly a dime under SoCalGas
Intra-Alberta quotes barely managed to creep any higher due to a
lightning strike at PG&E Gas Transmission-Northwest's Station
13 (see Transportation Notes) preventing any Kingsgate volume
increases, which caused gas to back up at the A/BC (Alberta/British
Columbia) border, said a Calgary source. However, the situation was
starting to ease Tuesday afternoon, he said.
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