Prices Stage Overall Uprising But Beat Late Retreat
The cash market was stronger by varying degrees Tuesday with
price movement ranging from flat to about a dime higher. But
sources didn't expect the firmness to last, since many points were
heading back down along with the screen in late business. Their
outlook was reinforced when the June futures contract continued to
drop in afternoon Access activity.
"Screen hype" made big numbers get bandied about early, said a
Midcontinent marketer, but cash actually got below Monday's
averages in late deals. However, enough business got done at the
early higher levels to generate an overall market rise. He reported
$2.16-17 pricing for the Midcontinent pipes but said they later
traded in the low $2.10s. It was a good day for selling early and
then sitting back and being patient enough to wait for purchases
several cents lower, the marketer said. "I call it waiting for the
K-Mart 'blue light special.'"
Though Wednesday's price hikes were geographically diverse, the
larger upticks again tended to be concentrated in the West. Chilly
weather in the Rockies and supply constraints in San Juan Basin
continued to support prices in those regions, traders said, but a
warming trend for the Rockies and western Canada is expected by the
Northwest's Green River Compressor Station is just 20 MMcf/d shy
of capacity, a Rockies trader said, which tells him there is a lot
of gas on the pipeline going south to storage. He also thinks a
supplier is selling gas only when the price goes above index and
putting it into storage otherwise, taking significant volumes off
the market at times.
After trading at a Midcontinent premium for a while, ONG has
finally settled back into the interstate pack. Late-month balancing
concerns on ONG caused the intrastate's relative strength, which
carried over into early May, one trader said. But for now people
can "play around with balancing their gas as they want," he said.
He expects at least a modest ONG premium to return near the end of
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