Heat and Screen Light Fire Under Cash Prices
Much of the U.S. bore some resemblance to a lit oven Thursday,
and the Nymex screen was soaring like a space shuttle takeoff from
Cape Canaveral. The two events combined to give strong support to
eastern cash prices, which rose between a nickel and a dime at
almost every point. Gas demand was especially intense at the
Northeast and Chicago citygates; both were up about a dime. Transco
Zone 6-NYC deliveries topped all points with a high of $2.70.
Only parts of the West, however, managed to share in the general
bull market. In fact, quotes fell by either side of a nickel at
Malin and the PG&E citygate due to a high-linepack OFO issued
for today by PG&E (see Transportation Notes). The Southern
California border was basically flat as SoCal Gas did not emulate
its Northern California neighbor. But a marketer looks for falling
border numbers today, saying he would be extremely surprised if
SoCal doesn't add its own OFO to PG&E's.
Outside of some Rockies/San Juan/Pacific Northwest flatness,
other western points failed to be depressed by the weakness of the
Northern California market. Waha and Permian Basin quotes for both
El Paso and Transwestern rose more than a nickel, undoubtedly
feeding off the strength in the Midcontinent/Midwest market, a
marketer said. A Calgary source reported intra-Alberta prices
rising into the low C$2.80s and Westcoast Station 2 up to the mid
Indicative of the rapidly rising air conditioning load for gas,
Duke Power in the Carolinas and Commonwealth Edison in the Chicago
area reported experiencing record electric demand Wednesday and
Dayton Power and Light in Ohio posted its own record Thursday.
Power generation load was very heavy in the Cinergy pool, which
helped push Appalachian gas prices more than a nickel higher, a
marketer said. And Florida Gas Transmission extended an OFO at
least through Thursday due at least in part to power needs in the
Florida peninsula, another trader said.
One source professed not to know what was going on in the Nymex
trading pit, but said it was obvious that identical 14.2-cent
runups in the Henry Hub futures contracts for both August and
September was partially behind the cash strength. "I guess either
the funds or locals finally forced all those shorts to get out of
their positions," he surmised.
August business remained a non-starter for most sources. One
reported doing Transco Zone 6-NYC deals at a paper basis of plus 25
and was hearing TCO at plus 15. A Gulf Coast marketer quoted basis
trading of minus 5.5 for Tennessee's 500 Leg, minus 1.5 for TGT
Zone SL and minus 2 for Columbia Gulf-onshore. A western trader was
hearing fixed-price talk of $2.10-11 for San Juan-Blanco and $2.26
for El Paso-Permian.
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