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Market Claws Higher on Weather, Futures

Market Claws Higher on Weather, Futures

Cash prices finished the week on a positive note as continued incremental heating demand and a strong futures market bolstered prices Friday. Trading was very active from the outset, a Gulf trader told Daily GPI. "There were some undeniable factors pointing to higher cash prices. Overnight gains in Access trading set the tone, then the over the counter market verified the strength," he explained. So it came as no surprise when the first cash offers were a nickel or more above Thursday's averages. But the market could not sustain the price rally and after buyers had filled their requirements at around 9:45 CST, seller realized their lowest prices of the day in late morning dealings.

Higher prices were not localized in the East. Rockies prices also defied traders' expectations by retaining their strength. Sumas, however, was the notable exception slipping almost a nickel from Thursday's levels. And a Northwest trader fears the price rout will only get worse today. He points to storage maintenance in British Columbia that will flood the market with as much as 300 Mcf/d.

But as British Columbia loses a storage facility, the Rockies gains one back. A Rockies trader said the Clay Basin Storage facility, which is located near Vernal, UT, being back up after being down for four days due to project work (See Daily GPI, April 9) helped keep the market strong Friday. "When the Clay Basin opened up, any excess gas went there, instead of being sold at a cheaper level. There is 56 MMcf going in [Saturday] from the Northwest pipeline, and I think that helped keep things up."

Looking forward to this week, one Midcontinent trader said weather will be making its presence felt in the opposite direction of last week's price increasing performance. "Although there is snow on the ground in Des Moines, IA, temperatures should normalize in the next couple of days and cause spot prices to slip slightly."

One forward-looking Midwest source is already scouting out the upcoming bidweek. He expects a heavy amount of index deals, with a bullish futures market helping to welcome in the new prompt month.

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