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Prices Up, But Some See Cash Market Peaking

Prices Up, But Some See Cash Market Peaking

Cash prices continued climbing by another nickel or more at most points Wednesday, but traders sensed the market might have peaked for the first week of the May aftermarket. They cited late deals being done several cents below the early-morning highs. And the AGA storage report of 34 Bcf in injections last week, although it came too late to affect Wednesday's cash business, was regarded by many as contributing to a more bearish mood. One source characterized the figure as "kind of middle of the road" (because it met the expectations of many) but leaning slightly to the bearish side. He and others noted the drop in Access futures prices after the report came out.

Unlike Tuesday, when people could point to a screen rise as the main rationale for firming cash numbers, the Nymex trading pit was providing no clues Wednesday, remaining unchanged during regular session action. Fundamentals remained virtually nonexistent; "there are no big pipe constraints or significant weather anywhere," a Northeast-oriented marketer said. "This [cash] market seems to have a mind of its own."

That may have been true for her region, but a Southwest trader said a scheduled outage today of Transwestern's La Plata Compressor Station on the Ignacio-to-Blanco segment helped push up San Juan Basin numbers about a dime into the mid $2.00s. The work will cut about 500,000 MMBtu of supply for today only at the Northwest/Ignacio, Williams/Ignacio and Amoco Florida points. Northwest-domestic prices performed similarly to those for San Juan.

One marketer reported mid- to high-$2.40s numbers at Niagara, about 8 cents less than her Transco Zone 6-NYC deal at $2.56. She said she can buy relatively cheap gas at Niagara and economically transport it via National Fuel Gas to Leidy (PA) and from there to Zone 6 via Transco, even with two pipeline tolls to pay.

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