Cash Stays Mostly Flat Amid Bearish Conditions
Bears came out of the gate in force Thursday in reaction to a
higher than expected 91 Bcf storage injection, a plummeting futures
screen and cooling temperatures in the Northeast. But for all the
sound and fury most points stayed flat to Wednesday's results or
registered minuscule drops of a penny or so.
The onslaught of bearish fundamental news was the least of
traders worries yesterday, however. Energy trading took a severe
hit from a devastating computer virus that was delivered as an
email attachment named "zipped_files.exe." When activated, the
virus proceeds to destroy files with various extensions. The virus,
called Worm.Explore.Zip, which originated in Israel, was reported
by several companies and seriously inhibited El Paso's
Houston-based marketing operation. "We got infected around 1 p.m.
and had to shut everything down. Basically, we were out of
commission at that point," an El Paso spokeswoman said. "[Friday],
we have special instructions on how to reboot and hopefully, not
too much was lost."
Those who were trading attributed the cash market's support in
the face of a bearish storage report, moderating demand and
plummeting futures to utilities playing catch-up on storage
injections after relying on stored gas during the heat wave earlier
Alberta was able to fend off the bears Thursday because of an
extension of a NOVA system outage (see Transportation Notes).
Intra-Alberta was trading in the mid- to high-C$2.80s as it has
been all week. Maintenance has taken longer than expected and is
keeping more than 1 Bcf of gas off the system.
In Florida, a trader who did deals on Sonat in the mid to high
$2.30s said the situation was going to get worse before it gets
better. "Everything is in limbo right now. Demand is soft due to
mild weather, and oil is cheaper to use than gas right now. I think
Sonat is going to get down to the low $2.30s, and then action will
pick up because that is when gas will become cheaper than oil."
Although the Northeast markets finished lower Thursday, the fall
was nowhere near as large as Wednesday's price drop. The New York
Citygate lost a couple of cents, but still stayed in the mid
$2.50s. "People are realizing the need is just not there anymore,"
a Northeast source said, but he admitted that he did not know how
much farther the Northeast prices would fall. Temperatures in New
York were in the low to mid 70s yesterday, and forecasts call for
only a mild warm-up into the low 80s over the weekend.
One source, quoting Sumas prices in the low $2.00s, called
western points the "Energizer Bunnies" of the cash market. He
defied a widespread industry belief that snowmelt and subsequent
abundance of hydropower will drive down prices in the West. "I
don't think anything can bring these prices down. Look at
[Thursday]. The screen slid down fast, but Sumas is trading flat.
There is enough demand to go around, and I don't see anything
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