Nearly all of the market points in NGI’s price survey declinedfor the second day in a row Monday amid mild weather, a fallingfutures screen and the return of some nuclear power stations. Whilepoints in the Northeast felt the sharpest declines ranging from adime to 20 cents, Chicago managed to fight off most of the bearishsentiment and registered a small drop of 2 cents.
Cash weakness may continue today, one trader said, noting aNational Weather Service six- to 10-day forecast calling for normalor much-above-normal temperatures for almost the entire country.
For one Northeast trader, who was flat going into this month,yesterday’s losses did not signal the start of a prolonged drop.”The day wasn’t bad for me. I did all my November business duringbidweek, so I was able to just sit back and watch [Northeastprices] go down. I’ll be active later this week though. There stillis a demand for gas up there. Nobody seems to be having troubleplacing it.”
Prices in the Gulf Coast were generally down well over a nickelcompared to gas sold for Monday’s flow, a marketer said. She quotedTrunkline East LA and the Henry Hub in the high $2.60s. Adding tothe weakness contributed by the futures market, tropical depressionKatrina, which was moving from just south of Merida, Mexico in anorth-northeastern direction, is turning out to be “a majornon-event.”
Out West, gas prices fed off the strength of power prices, onesource said. “Power prices in California are really strong with $58peak power.and it really makes sense to buy $3.15 [gas] at the[PG&E] citygate when you can sell $58 power.” Later, theCalifornia Power Exchange exceeded the source’s quote, reaching$70/MWh. Interestingly, electricity prices increased despitePG&E’s announcement that Unit 1 of the Diablo Canyon nuclearplant has regained full power and Unit 2 will reach full power bythe end of this week. They had been off line since last Thursdaydue to high ocean levels. Also, a 498-MW power plant in New Mexico,owned by Public Service Co. of New Mexico, returned on line afterbeing shut down in mid-October for maintenance.
A Chicago marketer said citygate prices started at $2.75 andmoved gradually up to the $2.82 level yesterday morning. “Tradingwas mostly lackadaisical. The only real urgency was from a largeutility buyer who was short enough to be actively solicitingsellers for extra gas. Seems like they were trying to buy in thefield and move that up to the gate, but when they found that wasn’tgoing to work, they were forced to buy Chicago supply late [Monday]morning.”
Rockies points were among the heaviest hit yesterday, withNorthwest domestic and Stanfield each falling over a dime to the$2.60 level. One trader said there wasn’t a bull in sight. “Weatheris extremely mild, and Diablo is coming back to take somegeneration demand. Even without those factors, we’re leaningheavily on the screen and it definitely didn’t do much to help us.”
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