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Weekend Load's Price-Depressing Effect Returns

Weekend Load's Price-Depressing Effect Returns

Unlike a week earlier, the slump in gas demand that almost always accompanies a weekend had its usual negative effect on cash prices Friday. Declines ranged from only 3-4 cents at Midwest and Northeast citygates to as much as a dime or so at Southwest and Rockies points, where most of the maintenance outages at processing plants and compressor stations had ended by Friday. Most other points registered drops of about a nickel.

Other than lower weekend load, about the only influence cash had was initial softness from an eventually static futures screen, one source said.

The Opal Hub supply curtailment due to plant maintenance was scheduled to remain about 4% through Saturday (May 22), a trader said, but that level was "negligible" compared to the shortfalls earlier in the week. Kern River and Northwest, the main takeaway pipes at Opal, saw some of Friday's biggest falls of a dime or more.

In swing deals done through Tuesday because of today's Victoria Day holiday in Canada, a Calgary source quoted Sumas in the mid $1.90s Friday, around the bottom of Thursday's wide range. He was hearing Sumas fixed-price offers for June around $1.88.

The head of spot trading for a large aggregator wasn't surprised by how firmly cash prices held up last week. After all, the formerly much-ballyhooed storage surplus is dwindling rapidly, she said, and the market "seems to have found a good level people are comfortable with." She definitely doesn't want her company to go short during the June bidweek, recalling how that strategy has backfired for some traders this spring. Another reason to favor a long supply position, she feels, is that there "could be a serious deliverability problem developing from last year's drilling downturn. I think people will start noticing that more and more in future months." She doesn't expect Gulf Coast Gulf prices to get below the low $2.10s next week and thinks that could mark the low pricing point of 1999, barring any "big surprises."

Commonwealth Edison, the Chicago-area electric utility, said the return to service Thursday of Braidwood Station's Unit 2 following a record-setting refueling outage marked the first time since August 1993 that all available ComEd nuclear units were running at the same time. The Braidwood unit's return in just 26 days set a new mark for the shortest refueling outage at any of ComEd's nuclear plants, shaving just over three hours off the record set by Dresden Station in February.

It was a quiet day market again Friday, said a Northeast buyer to whom it seemed that "everybody is lazily gearing up for bidweek." June basis offers looked relatively cheap to her, citing offers at plus 21-22 for Transco Zone 6-New York City and plus 21 for Texas Eastern M-3. Previously basis had been running 3-4 cents higher, she said. A marketer was hearing basis of minus 5.5 for NorAm-east and flat for MRT mainline.

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