Market Sees Tiny Gains as It Waits for Weather
Most cash trading points managed to squeeze out minor upticks
Wednesday despite a modestly softer screen. Activity was subdued as
weather fundamentals remained as relatively mild for summer as they
were for much of last winter.
Noting the mild weather that has blanketed most of the South for
the last week or so, a Texas trader said hotter temperatures are
due this weekend, but that potential boost likely will be negated
by the usual weekend drop in gas load. However, he added, "that
means look out for Monday" when more heat will combine with the
start of a new business week.
A Southern electric utility reported Wednesday was the first day
this week it had bought any new gas "because it just hasn't been
hot enough for normal power loads this time of year."
A marketer considered it "pretty likely" that the major
California distributors will issue high-inventory OFOs again this
weekend, especially since currently hot western weather is expected
to moderate by then. He said he wouldn't be surprised to see the
region's recent pattern of big Friday price drops followed by big
Monday increases continue through the rest of the summer. The big
problem, he said, "is you usually don't recover as much price
territory on Monday as you lose on Friday, plus there's the hassle
of scheduling around OFOs and imbalances."
Despite the current market doldrums, several sources had bullish
near-term outlooks. The 59 Bcf storage injection report by AGA
turned the year-on-year surplus into a deficit, said one trader.
She also sees good reason to expect more heat in the major eastern
and southern market areas next week to boost prices.
The Calgary Stampede continues to occupy much of the attention
of many players in Canadian markets. That prompted one trader to
quip, "There's a lot of tombstones around around here." Translated,
that meant it's a dead market. However, he went on, it's wrong of
some people to complain that Stampede causes illiquidity.
"Actually, it (market) is very liquid. There's liquid lunches,
liquid dinners, etc.," he said, referring to the Stampede-related
socializing of traders.
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