Daily GPI / NGI All News Access

Heat Keeps Eastern Points on Rise; West Slightly Weaker

Heat Keeps Eastern Points on Rise; West Slightly Weaker

Cash prices turned in mixed results Wednesday, with eastern points mostly eking out small gains while the West tended to be flat to off as much as 3 cents in the Rockies and at the two main Northern California price points.

The screen gave a little support to cash, although a Chicago-oriented trader said most of the futures rally came after the cash market closed. But it was mostly the heat wave moving into the Midwest after plaguing the Northeast earlier this week that kept prices on the rise, sources said. Gulf Coast traders reported moderate increases in power generation load, and demand from Florida was strong enough to prompt an OFO declaration by Florida Gas Transmission (see Transportation Notes).

The impact of air conditioning load was more pronounced in the Midwest, where citygates registered some of Wednesday's biggest gains of up to a nickel. Michigan and Chicago deliveries returned to the vicinity of indexes in the low to mid $2.30s. In addition to power generation demand, one marketer perceived storage injections as still running strong and supporting prices.

However, a large producer labeled AGA's report of 78 Bcf in storage injections last week a "non-event, in my opinion."

Weather is "quietly" supporting the market, asserted a Gulf Coast marketer. Although current heat isn't as extreme as it was over the Independence Day holiday weekend, he said, the Midwest and Midcontinent are experiencing the longest period of sustained normal and above-normal temperatures yet this summer. Basis, both for next month and next year, is reacting accordingly by moving up, he said. "Basis offers are getting lifted as opposed to bids getting hit."

An intrastate Texas trader said he was making a lot of calls about August business "but not getting any response yet." Many suppliers were still trying to put their August production figures together, he said. Meanwhile, bid and offer numbers appear to be more than a penny apart, the trader said, and he was hearing Houston Ship Channel basis at plus 1.75-2.

A producer reported making Panhandle Eastern basis sales at minus 9.75 Tuesday and at minus 8.5 Wednesday, but said basis was widening again Wednesday afternoon. He was hearing fixed-price numbers around $2.16 for Panhandle and NGPL-Midcontinent. A western source agreed that basis was widening as the screen went higher. He pegged Sumas and Rockies pipes in general around $1.98-99 and Malin at $2.18.

Basis action was mostly tighter Wednesday to a Midcontinent marketer who saw ANR trading at minus 8.5-9.5. Index premiums started to show up, he said, citing an ANR sale at index plus 0.75. Even though prices have been below index for most of July, the marketer said, "buyers are acting like they need to own the gas in August and don't want to get caught short."

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus