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Prices Stage Overall Uprising But Beat Late Retreat

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 weekend.

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 May.

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