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Screen Leads Cash Market to Moderate Downturn

Screen Leads Cash Market to Moderate Downturn

As many had expected, the cash market retreated slightly Thursday from the early May aftermarket peaks posted Wednesday. The decline was moderate with most points off anywhere from a penny or two to just over a nickel.

Fundamental influences continued to be lacking, so nearly all sources considered the futures screen's drop of more than 6 cents as the main cause of cash softness. However, a Gulf Coast/Midcontinent trader said power generation load, which had helped drive the market higher earlier in the week, appeared to be easing off as more non-gas-fired units come back on-line from maintenance or refueling outage. Another source noted that many people thought the Wednesday afternoon storage report was slightly on the bearish side.

Chicago and Michigan citygates were trading at approximate parity around $2.40 Thursday after entering the month with Michigan indexes commanding a premium of 4-5 cents over Chicago's, a marketer said.

A marketer was unsure whether to expect more softness today "because the screen seems to have found a bottom at $2.26 [Thursday]." But another marketer wasn't hesitant about predicting further price declines, citing mild weather overall and the usual dropoff in weekend gas demand.

One source expects a good number of deals done today to be made for gas flow through the middle of next week as a large part of the trading community prepares to attend the GasMart/Power '99 trade fair in Dallas Monday through Wednesday.

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