Mild Cash Rises Backed by Screen, Cold Front
Some sources seemed to think the cash market was manufacturing
price increases out of nothing Thursday. Others, however, said mild
support from the futures trading pit combined with a cold front
moving towards the East Coast to generate price firmness ranging
from flat to up about a nickel. For a change there was no
geographic pattern in the market as the price gains tended to be
scattered across all regions.
"We're just sitting here watching the screen" because there was
little else happening to influence cash trading, a Gulf Coast
marketer said. He and other sources thought the market may be
settling in for another period of low price volatility similar to
the one that dominated March activity. One trader said he was
waiting for "another move to get going on Nymex; this latest one
[Thursday's rise of a little over 4 cents] wasn't enough."
The company bonus from recently strong gas prices "is I get to
keep my job," a Gulf Coast producer told NGI. Screen strength was
about the only thing cash gas had going for it, he said. However, a
marketer reported fairly heavy citygate demand in the Midwest,
where temperatures have gone south in the last couple of days.
Chicago deliveries in the low $2.20s led Midcontinent field numbers
by 15-17 cents.
A Houston marketer was pleasantly surprised by the Gulf Coast's
ability to resist turning lower now that the Zone 1 outage of
Florida Gas Transmission is ending. "Despite the excess supply,
there was good incremental demand at the north end of many of the
[pipeline] systems," he said. "New England, Ohio Valley, Michigan
and Wisconsin utilities were seen buying in the spot market rather
than diverting some of their baseload purchases, which have been
earmarked for storage."
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