Prices See Little Change, But Trend Still Bullish
Most of the cash market leveled off Wednesday, with few points
straying more than a penny or two to either side of flatness. The
Rockies, where weather is currently chilliest, recorded most of the
gains of 3 or more cents. Although the screen eventually achieved a
gain of more than 3 cents, cash had only moderate softness in
futures as a morning influence.
The standout in Daily GPI's price change column was CIG, where
Denver-Julesburg Basin quotes soared by twenty cents and non-DJ
prices rose almost a dime. This was primarily due to Public Service
Co. of Colorado declaring an OFO-like Restricted Delivery Day for
today through Sunday, a marketer said. The restriction was issued
due to PSCo's storage situation and low linepack, he said, and
carried penalties of $25/dth plus the gas commodity cost. "Usually
you'll see DJ prices soar when that happens," he added.
Cash prices remained relatively strong even with not much change
from Tuesday, a Midcontinent/Midwest marketer said. He sees little
in fundamentals to influence the market right now, but agreed with
other sources that many points were trending a few cents higher as
the trading session went on.
A Rockies producer had no trouble explaining the relative
firmness at western points. "Despite all the tools available for
accurately analyzing the gas market, sometimes the most simple
rule-cold weather makes gas more expensive-says it all," he said.
With a cold front moving into the region, expected high
temperatures at many Rockies locations will be only in the mid 30s
today, the producer added. That's why CIG and Questar were easily
the day's biggest gainers, he said.
A marketer said there's still "a little bit" of heating load in
the Pacific Northwest, causing his Sumas purchases to rise from a
low of $1.82 to a high of $1.88.
The Gulf Coast's largest increases of 2-3 cents were at closely
linked Houston Ship Channel and Katy. A storage play is happening
there, one trader said. Although Wednesday's volume was down from
Tuesday's, he was still withdrawing from storage to sell at the
A price squeeze occurred at Northern Natural's demarcation
point, a marketer reported. Gas that usually moves north from Waha
to demarc stayed on the south end of the system, he said, causing
some demarc buyers to pay up late.
Bullish sentiment is helping Chicago basis for May to widen from
last week's levels, one source said. Paper is now trading at plus
4.25, he said, while physical is plus 4.5.
A Midcontinent trader pegged May-October basis at minus 9 for
ONG and at minus 10-10.5 for ANR-Southwest and Panhandle Eastern.
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