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May Prices See Little Movement; Swing a Bit Softer

May Prices See Little Movement; Swing a Bit Softer

As trading for next month picked up some momentum Wednesday, the May market appeared to be developing with less volatility than in previous bidweeks this year. One marketer reported Chicago citygate deals Wednesday in the exact same $2.36-39 range as he had traded Tuesday. Many other points also were reported to be staying close to their starting levels. However, a couple of sources reported Southern California border numbers falling slightly to $2.22-24 from the mid-$2.20s., while a marketer said Sumas was recovering to the mid $1.90s after having dipped slightly Tuesday.

A Calgary trader attributed the Sumas rebound mostly to AGA's afternoon report of 5 Bcf in storage injections last week. An Oklahoma marketer said he considered the figure bullish because his company had been anticipating injections of at least 20 Bcf.

"Producers and marketers are caught in a standoff right now over [May] prices," a Midcontinent source said. "Producers are hesitant to sell their supply as baseload only to have aftermarket prices move up like in April. Conversely, marketing companies are skeptical that these prices are going to hold up, and they also are willing to wait until the swing market."

The above source reported ANR-Southwest, Panhandle Eastern and NGPL-Midcontinent pool trading evenly with each other at $2.23-25. But Northern Natural-demarcation point is lagging, he said, quoting a $2.14 demarc deal done Tuesday. Demarc is being discounted because of the perception that plentiful Canadian gas will find its way south to Northern Natural-Ventura, he said.

A Texas marketer reported Waha ($2.23-26) trading at virtual parity with the Southern California border ($2.24) for May. In April indexes, the border index of $1.78 led Waha by 6 cents. She also quoted El Paso-Permian at $2.14-15.

In the near-afterthought that was late-April swing business, a few points registered as flat while the majority were slightly softer by 1-3 cents. At a nickel down, Northwest-domestic was one of the rare markets dropping my more than 3 cents; however, Sumas gas into Northwest was nearly flat in the low $2.00s.

Hasn't storage injection season started yet? Northwest's Wednesday morning bulletin board report of Jackson Prairie storage activity for Tuesday's gas day showed about 61 MMcf of withdrawals nominated, and the actual withdrawal figure was more than twice that at about 129 MMcf.

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