For the first time in several trading days, there was nodivergence between Eastern and Western market directions Wednesday.It was up, up and away all around as nearly all points registeredgains of around a dime or higher.
Except in the cases of a few markets, the question was: Why?With more pipelines warning of possible OFOs due to excess linepackand little storage injection flexibility (see TransportationNotes), especially in the Gulf Coast region, and little to nochange in demand fundamentals, it seems preposterous thatWednesday’s price run-up could have been so strong, sources toldDaily GPI.
It seems that ANR’s requirement that all interruptible storagehad to be emptied Wednesday should have contributed to softness inboth the Midcontinent and Gulf Coast, a marketer said. This was thefirst time he could remember ANR issuing such a notice to make roomfor extra firm service demands. In previous years his company wasable to carry up to half a Bcf of ANR interruptible storage intothe winter season, he said.
Noting he was hearing forecasts of warmer temperatures cominginto the Midwest, one trader said Dayton Power & Light in Ohiowas issuing a high-linepack OFO, and he was willing to bet thatCincinnati Gas & Electric and possibly other utilities in thearea would do likewise and/or turn back supplies.
At least the West, where some Rockies pipes were exceeding GulfCoast and Midcontinent pricing, had some justification for risingquotes. “A lot more of the Canadian stuff is staying home thanusual, and that’s got these Northern California guys buying likecrazy from the Southwest now,” an Oklahoma source said. A Calgarymarketer confirmed this, saying NOVA had changed its imbalancetolerance from +10%/-10% to +20%/0%. “That means you can’t draft itat all, and Alberta prices [up to the mid C$2.60s Wednesday] makeit not really conducive to moving gas south,” she added.
In addition to other factors, El Paso’s announcement that aBlanco constraint would stay higher than expected through Friday(see Transportation Notes) also boosted Southwest and Californianumbers.
A Houston marketer declared that Wednesday’s AGA storageinjection report “has to be bogus” to the low side. The producingregion figure of 6 Bcf should have been closer to 30 Bcf, hebelieved. Also, a total injection volume of 41 Bcf for the thirdweek in a row seemed about as likely as one person winning thelottery three times in a row, the marketer added.
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