Getting a tremendous boost from the addition of nearly 900 MMcf/d in takeaway capacity, Rockies gas led an overall moderately strong beginning of the April aftermarket with jumps of more than a dollar in most cases Wednesday. San Juan-Blanco numbers also saw sizeable upticks of more than 60 cents, while non-Rockies points ranged from about a nickel to a quarter over end-of-April levels.

“It’s an infamous day [Thursday],” because the Kern River expansion goes into service, one western trader said. He said colleagues had been thinking it would take a while longer to fill all 885 MMcf/d of expansion capacity, “but Kern River is full!” the trader exclaimed. This changes all the dynamics of the Rockies market and should bring prices there closer in line with the overall market from now on, he added.

“What a big difference between baseload and swing for May. With the weak [futures] settlement Monday and the lackluster market Tuesday, buyers kept stepping back, figuring the market would come to them. And it did,” commented a Northeast trader who saw plenty of sellers of baseload supply for May but not many buyers.

“Cut to swing trading for May 1 flow, and it is a totally different story,” he continued. “It appears as if many buyers elected to wait for the incremental market to do their business, and now they are driving prices higher.” With power prices relatively strong, the spark spreads made it economic for many generators to buy gas, he added, noting that his company had fired up a few gas-fired power units “for that very reason.”

The trader noted that a second unit of New York’s Indian Point nuclear plant had joined the first Tuesday in an unscheduled shutdown, meaning the plant was totally offline “and creating more demand for gas” in the region. He also heard there was additional gas buying from generating plant owners who had switched from coal and fuel oil in an effort to conform with stricter emission credit standards that went into effect May 1.

Two participants in the Northeast market sounded something like a chorus in discussing the weather. “It is finally warming up on the East Coast,” said a producer before catching himself. “Well, at least it’s not snowing. It looks like the endless winter has finally ended.” And a Northeast utility buyer, after remarking on the “gorgeous weather here now,” added, “At least there’s no more ice on the lake.” Snow has occurred in the area as late as May 9 “in my memory,” she said.

It was only a matter of time, a couple of Florida utility buyers agreed about Florida Gas Transmission’s warning customers of the possibility of an Overage Alert Day notice Thursday (see Transportation Notes). “I’m pretty sure we’ll get one [OAD],” said an LDC staffer. “It’s getting pretty warm here.”

The other buyer noted that “we usually have to scramble for intraday gas on such occasions, but during the summer season you kind of assume an OAD almost every day and try to plan accordingly.” Observing that FGT doesn’t actually declare a notice until the morning of the gas day it goes into effect and that he is unaware of any other pipe that doesn’t give day-ahead warnings of such constraints, he said that might be a matter to bring up at FGT’s customer meeting scheduled later this month in Naples, FL.

“Cash ran up today [Wednesday] because traders are starting to fill storage regardless of cost,” a Gulf Coast producer said. “Plus there seems to be a trend where prices sell off at the end of the month due to index pressure. Then, once the new month is under way, prices roll back up.” He went on, “I have heard people talk about the ‘new floor’ [for prices]. Some say it’s around $5.00 and maybe that is justified. But if we are filling storage at a steady pace, and September rolls around and there’s no winter, we could get below $5.”

A day after one source reported his San Juan-Bondad purchases above Blanco because of a late fall in Blanco pool numbers, another quoted a similar Bondad premium Wednesday for the opposite reason: “Us having Bondad above Blanco was purely a timing thing because Blanco was higher later.”

Several traders agreed that very little May business remained to be done Wednesday. “There is almost no activity going on out there,” said one. “People are just trading for the first.”

May prices continually fell with the screen throughout bidweek, according to a marketer who trades the Southwest. “There is too much supply and not enough demand. I couldn’t give it away during bidweek. So you would think there should be no problem filling up storage.”

A Rockies utility buyer who had nothing to report for May said he was hoping prices “will come down in the aftermarket due to mild weather, although I realize that’s not happening today.”

A Midcontinent utility buyer who indexed all his May purchases and bought nothing new for May 1 said, “May is a dead month for us, because there’s no AC [air conditioning] or heating load to speak of.” His company is a gas distribution operation only, but it also serves electric generators, “so if their loads go up or down, ours does too.”

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