Futures Plunge May Get Delayed Cash Reaction
"Following the screen" obviously didn't apply Tuesday as the
cash market's mostly flat performance was a far cry from the
8.1-cent drop in the Henry Hub futures contract for June. But, as a
Gulf Coast trader noted, a substantial portion of the screen
softness occurred after cash had finished trading for the day, and
to him that means it's a safe bet to expect a decline in cash
Weather continued to have virtually no impact on the current
market, with temperatures ranging in the 60s and 70s across most of
A Houston buyer pointed out a potential depressant on gas
prices: A plunge of more than 80 cents Tuesday in crude oil futures
for June left that contract not far above $17/bbl. Apparently crude
traders are losing faith in the ability of OPEC nations to maintain
production cuts promised earlier this year, he said.
Tuesday's only significant price hikes of more than a couple of
cents came in San Juan Basin and on Northwest (domestic), which are
affected by supply constraints resulting from maintenance outages
at the Blanco and Opal plants respectively. However, the outages
don't appear to be hindering acquisition of gas very much, said a
big aggregator quoting Northwest at $2.13-14, barely a penny under
his San Juan deals at $2.14-15.
Plant turnarounds in Alberta are helping provincial prices to
resist any screen-related softness, a marketer said.
One trader expressed surprise at seeing cash quotes hold firm in
the Midcontinent. Deliveries into Northern Natural Gas at Ventura
got some boost by a cut of 10% on Northern Border volumes, which
sent some people scrambling for replacement gas, he said. The
Northern Border bulletin board said unplanned, weather-related
compressor outages at Stations 13, 14 and 17, combined with an
upcoming planned outage at Station 13, required the pipeline to
reduce flows to 90% of summer design capacity for today through
A marketer reported having no luck in trying to get some June
business going either Monday or Tuesday afternoon. He was hearing a
"typical" differential of about 1.5 cents between bids and offers
at Texas points.
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