Softer Cash Prices Buck Supportive Influences
Slowly but surely the faux summer that much of the eastern U.S.
has experienced recently is turning into "real summer," a marketer
noted. But even that and a moderate gain by the August Henry Hub
futures contract were not enough to avert softening at most cash
trading points Thursday. Eastern declines tended to be minuscule,
with a few points staying flat and few others falling by more than
1-2 cents. But an easing of Southwest supply constraints and
generally cooler weather in the West caused larger price drops in
the West, topped by a loss of several cents in the San Juan Basin.
Increases of about 3 cents in Transco's Zone 6 (both NYC and
otherwise) provided about the only gains of more than a penny or
so. That reflected another market anomaly, because the Midwest
appeared to be heating up more quickly than the Northeast, yet
Midwest citygates were flat to off a couple of cents.
Gulf Coast cash in general opened a bit firmer at $2.13, got up
to $2.14, fell to $2.09 and then wound up around $2.11, a
utility-affiliated marketer said. In other words, he added, it kind
of piddled around without going much of anywhere. Even with a
warming trend, power generation load remained weak in the South,
another trader said.
A Midcontinent source thought prices would fall more than they
did while the screen was at its low point of $2.11, but said they
"hung in there" largely due to warmer weather.
Although a turbine unexpectedly remained down at El Paso's White
Rock (NM) Station, keeping a constraint of 200 MMcf/d in San Juan
Basin (see Transportation Notes), most of the basin's major supply
curtailment of more than 450 MMcf/d ended with completion of
maintenance at El Paso Field Services' Chaco Plant. The return of
that much gas to market, along with moderating western
temperatures, had a rippling negative effect on the Waha/Permian
and California markets and on several Rockies pipes.
Following temperatures around 85 degrees earlier this week, it
was wet and near freezing in the Calgary vicinity Wednesday and
Thursday, one trader said. Such conditions may have generated a
modicum of heating demand, but it didn't keep intra-Alberta prices
from falling almost a nickel to around C$2.67-68, she added.
Widely anticipated repeats of weekend OFOs by the big California
LDCs are likely to keep western prices in a free-fall today,
sources said. However, several thought the significantly hotter
weather expected over the weekend in eastern markets could very
well cancel the usual low-demand effect on prices.
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