Overall Gains Are Largest in Western Markets
Increases of about a dime or more were common in the cash market
Monday. The upticks tended to be larger in the West, approaching 20
cents in the California market and on some Rockies pipes. There was
some fundamental validation of Western firmness as the region was
unseasonably cool, especially in the Pacific Northwest, where
temperatures were colder than in Alberta, a Calgary source said.
As for the East-"there's no special reason for prices being
higher there, but they are," a marketer said. He speculated that
some traders might be continuing to indulge in storage plays,
buying physical gas now for injection and selling outer futures
months. That concept got a modicum of support when, in contrast to
the cash strength, Nymex's Henry Hub contracts for May through July
finished slightly lower.
Some Louisiana points were seeing their first $2-plus quotes
since early January. Sonat was running flat to slightly less than
the Henry Hub Monday after commanding a modest premium for much of
March, one source said. Currently Sonat is "so packed that it is
hard to bring gas into the pipe," he added.
Prices "screamed upward" in the West, according to a trader
whose Malin deals in the mid $1.90s were 15 cents above those
preceding the Easter holiday weekend. Not only was there
significantly cooler weather than usual for this time of year in
the West, he said, but a modest screen gain achieved Thursday after
the cash market had finished trading provided some support for the
physical gas market Monday morning.
A small NOVA rupture late last week (see Transportation Notes)
was of little importance to cash traders, a marketer said, but a
low-linepack tolerance change caught more of their attention. Also,
what he perceived as a basis play at Aeco C storage was becoming
stronger "especially now that the basis between April and May has
shrunk significantly." His company was seeing much less gas making
it down to Malin from Alberta than in previous times "because the
prices [Alberta-Malin basis combined with transportation rates]
don't make much sense."
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