Daily GPI / NGI All News Access

Storage Report May Depress Aftermarket

Storage Report May Depress Aftermarket

The April aftermarket was off to a very strong beginning in swing deals done Wednesday. Virtually every point was trading above bidweek levels and in some cases much higher. For example, a buyer who paid in the mid $1.70s for April baseload at the Southern California border reported a $1.90-95 swing range. Most sources agreed that the incremental price strength derived almost entirely from "following the screen" upward.

But as a producer observed, "Everything looked like it was going through the roof until the AGA report came out." He was fairly certain that the anemic figure of 37 Bcf in withdrawals last week would soon deflate April's early price run-ups.

Indeed, even before the report was issued, there were indications the cash market's bullishness was starting to run out of steam. Incremental numbers followed futures higher for much of the morning, one trader said, "but by about 11 p.m. CST prices just tanked." Chicago citygates that had been in the $2 area earlier fell to about $1.90, he said. And a Midcontinent producer said Panhandle Eastern backed off to $1.80 after running up to $1.87.

A marketer believed some of the late softening resulted when buyers had covered their positions. "After that there were just no buyers to be found," he said.

Although most deals appeared to be for the 1st only, some people were also trading for the April 1-5 period because they have the Good Friday holiday off, a marketer said. The five-day prices tended to be a little lower because of some doubt about how weekend conditions would develop, he added.

A source who had traded Sumas mostly in the low $1.50s during bidweek reported swing deals that ran up from $1.56 to a peak of $1.70. A bit of colder weather in the Pacific Northwest and the start of storage injections served to tighten supplies at Sumas, he said.

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus