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Screen, Cool Weather Generate Mild Swing Firmness

Screen, Cool Weather Generate Mild Swing Firmness

The mini-rallies reported at several points in Wednesday's late cash trading apparently carried over into Thursday, resulting in a flat to slightly higher March swing market. A strong showing by Henry Hub futures on Nymex helped give cash a boost, sources said. In addition, there was enough chillier weather in the midwestern and northeastern market areas to have an impact on heating load.

The Wednesday afternoon storage report had no effect on prices because "everybody knows there is too much [gas in storage] anyway," according to a marketer.

A producer perceived April basis as "about a quarter-cent stronger" Thursday compared to the day before. Another producer said it seemed that buyers of April gas didn't expect the futures run-up, so they tried to hold out, "but sellers did too." Trading was kind of a standoff most of the day, he said, but some buyers were emerging to make deals in the afternoon.

A marketer quoted April prices for Panhandle Eastern, ANR-Southwest and NGPL-Midcontinent all in the $1.72-74 range. General Midcontinent basis is minus 8-8.75, he said, with ANR the strongest at minus 8. He pegged Chicago basis at plus 4.25-4.5.

One trader was hearing El Paso-Permian at $1.64 in the morning, but said the numbers had jumped up to $1.77-775 after lunch. Other sources also reported a slight firming trend in the light amount of fixed-price business being done.

A marketer said Chicago citygates for April started the day in the low $1.80s but he heard a $1.87 deal was done later. "Somebody out there must know something we don't," he added.

Saying his company remains somewhat bearish about the remainder of bidweek, a Midcontinent source admitted, "I think the psychology is starting to shift. Nobody is hoping for higher prices because of winter, they're hoping for higher prices because we're going to start injecting in May and June." He said he had heard quite a bit of talk about a "long, hot, dry summer for the Southwest. That means people there are already looking to own gas for electric generation."

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