California OFOs Depress West; Eastern Softness Milder
Weekend prices drifted lower by varying degrees Friday, ranging
from barely a penny down on a couple of Gulf Coast pipes to
double-digit decreases throughout much of the West. A flat screen
provided no cash guidance, traders said, so it was primarily milder
weather plus the typical drop in weekend load that prompted
moderate declines of about a nickel or less at most eastern points.
There was additional reason for prices to get depressed in the
West, however. Both of California's two giant distribution systems,
Southern California Gas and Pacific Gas & Electric, had
high-linepack OFOs in place for Saturday (see Transportation
Notes). Not only were the Golden State's three major price points
down by more than a dime, but similar negative price effects from
curtailed deliveries into California rippled back into the Rockies
and Southwest production basins.
The only western points with small declines tended to be
Canadian-oriented, such as Sumas, Stanfield and intra-Alberta. Not
all traders in the city attended the Calgary Stampede rodeo parade
Friday, but the annual event drew enough of them out of the office
that few wanted to bother with fixed pricing, preferring to index
most weekend deals, one source said.
The weekend market slump could have been worse, a Gulf Coast
marketer said. Demand was consistent with gas trading more than a
dime below index, he observed. "Anybody with a cranny or a crevice
in which to stick gas" (storage, that is) was eager to buy Gulf
supplies in the mid $2.10s, he said.
A trader quoting Chicago at $2.18 said citygates trickled down
throughout the morning trading session as sellers scrambled to
unload gas for a relatively mild weather weekend. Chicago basis for
August is currently plus 3.25, he said.
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