Prices managed to rise at nearly all points Thursday, boosted by cooling trends in northern market areas, continuing cold in mountainous parts of the West and ongoing momentum from three preceding days of futures gains this week. But Thursday's 36.5-cent screen reversal (in response to a moderately bearish 5 Bcf weekly storage injection), combined with the weekend loss of industrial load and the fact that little if any especially severe cold was in the offing, made it likely that softness would prevail in the cash market Friday.
Carthage in East Texas and Kern River in the Rockies saw the only losses of about a nickel each. Otherwise, a flat Opal, CIG and Texas Eastern-East Texas were mixed into upticks ranging from about a nickel to nearly 30 cents.
The Wyoming Interstate Co. (WIC) situation in the Rockies market remained clouded. The pipeline was still trying to restore mainline service as of Thursday afternoon after shutting in the mainline following a rupture last Saturday west of Cheyenne Station. It marked the third successive gas day by which WIC had hoped to have rupture repairs completed, but had not been able to do so.
Repair work continued Thursday on the system, a spokesman for corporate parent El Paso Corp. said, and WIC was in the process that afternoon of bringing the 36-inch diameter mainline on-line.
A western marketer said his company understood that WIC capacity would be restored Thursday afternoon, possibly in time to allow Intraday 2 nominations, which is the last intraday cycle of each gas day. Traders "have been a little apprehensive" in making WIC-related nominations recently, he said, "but we've heard they will be able to handle everything for Friday." Despite the continuing delays, he said people have had relatively little trouble making transportation arrangements to work around the outage, but they've had a "kind of blind faith attitude" on when WIC service would return.
Following the wild Rockies price gyrations of Monday and Tuesday, the WIC situation isn't having that much impact now because western markets are pretty much balanced on supply and demand, he said.
Friday's removal of a PG&E high-inventory OFO relieved some negative pressure on western prices.
A stormy cold front will be moving through the Northeast Friday, but its heating load impact is unlikely to be substantial. For example, Friday's lows in Boston and New York City are predicted to get down to only the low to mid 40s. It will be chillier than that in the South, where Atlanta was expected to see a 39-degree low. But for North America in general, most areas are seeing no worse than seasonal mid-November weather.
It's almost certain that Thursday's screen dive will cause cash market declines Friday, said one source. There's just not enough extreme cold to make a difference, he added. The source noted that the western hydropower season is going into its final phases, and is starting to recharge for next spring's snowmelt. In general, the market is experiencing "plenty of supply for not that much demand," he said.
He added that it looks like traders are already starting to get a jump on indexing baseload for December, probably looking ahead to next week's Thanksgiving-shortened trading period.
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