“Where has all the gas gone now?” asked a Houston-based marketerTuesday as April numbers turned upward going into the home stretch ofbidweek. He was starting to encounter some tightness of supplies inthe Gulf Coast and Appalachian production areas that caused prices tobe bid higher. Echoing a producer’s Friday observation (see Daily GPI, March 29), the market suspectedthat reduced drilling budgets last year may be reflected now in afirmer gas market.

Fundamentals were even weaker than before as mild weatherpermeated most of the nation Tuesday, but sources cited strongincreases in the crude oil and natural gas futures trading pits assupporting the rises for both April and last-of-March gas.

A Canadian producer noted, “We expected a bullish bidweek, butnot as bullish as it turned out to be. As a producer, we’ll takeit.” His Chicago citygate sales began in the low $1.80s but got ashigh as $1.91 in a late deal.

A marketer said Rockies prices pushed up almost 8 cents forApril Tuesday, adding, “Nobody here was ready for it.” A cold frontis expected in the West during the first five days of April,boosting current regional demand, he said. “But after the weekend,when things warm up, storage gas starts getting cycled and some ofthese winter term contracts start ending, we are going to seeincremental prices come off.

One trader reported buying nearly all of his Southern Californiaborder gas at GPI’s index “minus anywhere from a penny to a pennyand a half.” But after border quotes popped up into the low $1.80sTuesday, he was able to re-sell a package at index plus a penny.

A marketer was confounded by the fresh price strength.”Fundamentally the gas market is still very weak,” he said. “We mayhave one more strong storage [withdrawal report] this week, butthat’s got to be it; it’s about time to start injecting prettysoon.”

Despite a general lack of heating demand, quotes for the lastday of March ranged from barely higher to about a nickel up.Traders continued to cite nuclear plant outages in the West andgenerally strong power generation demand elsewhere as responsiblefor cash’s bull market.

Several sources are expecting a very slow Thursday prior to theGood Friday holiday, saying many of their trading partners arelooking to make April 1-5 swing deals today.

Referring to the “Melissa” computer virus that has brought manycorporate e-mail systems to their knees recently, a utility gasbuyer had this take: “We didn’t get hit by any viruses, but theflood of messages we got [from information technology managers]about viruses may have been even worse.”

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