Weekend Prices Move Higher for a Change
Defying the conventional wisdom that lower gas demand over a
weekend usually causes softer prices, cash prices put on a show of
strength Friday with nearly all points rising by a nickel or more.
An increase of less than a penny in the Henry Hub futures contract
provided little support for the cash market, so sources concluded
it must have been the residual effect from Thursday's screen run-up
of nearly a dime that helped push up cash quotes Friday.
Weather fundamentals remained lacking for the most part, but
traders saw enough heat and humidity in Texas and Louisiana and
enough cool weather in the Pacific Northwest and western Canada to
generate a modest amount of air conditioning and heating load for
A marketer agreed that Thursday's screen spike must have been
responsible for Friday's cash firmness, but found it hard to
understand "how the Merc could reverse itself like that after
initially treating the AGA storage report as bearish."
Major processing plant outages starting today at Opal and Blanco
should keep the Rockies and San Juan Basin markets strong this
week, several traders said. One estimated the Opal work will
curtail about 500 MMcf/d today and Tuesday, while the Blanco
project will cut a net of over 700 MMcf/d initially and then lesser
amounts later this week.
A Calgary source reported intra-Alberta numbers rising from the
high C$2.60s into the low to mid C$2.70s as trading went on. But
traders in markets as diverse as the Northeast and San Juan Basin
instead saw a downtrend; the higher prices were early, according to
the Northeast trader. San Juan saw a wide range and "really dropped
at the end" into the $1.90s, a marketer said. Demand just dried up
after the California utilities got done with their weekend
purchases, he added.
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