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April Flat to a Little Softer; May Still Lackluster
Flatness and mild softness dominated the late-April cash marketMonday. Enough heating load was being generated in the Northeastand Midwest to keep citygates and a number of field pointsessentially unchanged from Friday. Most of the downticks of 2-5cents again occurred in the West, where mild temperatures wereprevailing.
The Waha-Katy spread is starting to return to near the 11-12cents that marketers like to see, said one reporting deals in thelow $2.10s at Waha and low $2.20s at Katy.
PG&E’s weekend high-linepack OFO, which ended Monday afterbeing in effect Saturday and Sunday, probably will have lingeringeffects on the market through the end of April, one source said.(Southern California Gas was still warning customers Monday abouthigh linepack but had not issued an OFO.) The distribution systemis still packed, he said, and although that doesn’t have a directeffect on Topock pricing because of the limited amount of Baja pathgas flowing right now, conditions in Northern California are notvery different from those in Southern California and thus borderprices are slipping. However, people with gas at Topock can takesolace that the basin-to-border spread has not shrunk from about 40cents since Blanco gas is trading in the low $1.90s, he noted.
Few utilities in the West were buying April gas Monday “becausethe weather just is not there,” a trader said.
The May bidweek continued to be mostly basis and index business.A producer wasn’t surprised that buyers were still hesitant afterseeing May futures drop another 7-8 cents Monday; they figurephysical May gas may get even cheaper today and Wednesday, he said.He did see convergence with the screen in doing Henry Hubfixed-price sales at $2.26-27.
Convergence wasn’t nearly that good for a Southwest trader whodid San Juan-Blanco deals for May at $1.98-2.00, almost a dimeabove his late-April price at Blanco. With next-month gas tradingat such a healthy premium to current spot, “we were packing gasinto every nook and cranny of our plants to try to take advantageof the higher prices next month.”
Other fixed-price May quotes included the low $2.10s at Malinand low $2.20s at Carthage. A marketer was hearing SouthernCalifornia border reports of $2.33-35 via Kern River.
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