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Prices See Little Change, But Trend Still Bullish

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 Ship Channel.

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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