Daily GPI / NGI All News Access

Eastern Prices Soar on Cooling Load While West Falters

Eastern Prices Soar on Cooling Load While West Falters

The geographic divide between gas markets seldom has been more distinctive than it was Friday. Opposite corners of the U.S. represented the extremes: Northeast citygates skyrocketed by nearly 20 cents while the OFO-hit Southern California border plunged by about 20 cents. In general it was another case of East being East and West being West, and the twain had almost nothing in common.

Quotes for eastern markets gained upward momentum going into the weekend, sparked by more record-setting heat with little let-up in sight and the second straight day of double-digit gains on the futures screen. Almost every point rose by a dime or greater amid a widespread cacophony of electric utilties reporting new power demand records, appealing for energy conservation, curtailing interruptible customers and/or warning of potential rolling blackouts.

It took Duke Power and Commonwealth Edison, which had announced setting load records Wednesday (see Daily GPI, July 23), only one day to break those records Thursday. The heavy gas demand had many people pulling gas out of storage to satisfy it, a Midcontinent marketer said. "That [storage withdrawals] will always raise prices" when it happens during what is normally an injection period, he noted.

Pacific Gas & Electric threw a curve by many traders when it elected not to continue a high-inventory OFO beyond Friday. Quite a few deals were done on the presumption that the OFO would still be in place Saturday, a marketer said. It's really a guessing game on whether the OFO might get re-instituted for Sunday, she said, "but you can bet everybody concerned will make sure their pager batteries are fresh this weekend."

There was no guesswork about the Southern California border as SoCal Gas declared an Overnominations Day for at least Saturday. A PG&E citygate drop of a little over a nickel was quite mild in comparison to the border's plunge into the high $2.10s. The California weakness rippled into the Rockies, where gas that couldn't find its way into the high-priced Midcontinent/Midwest markets was subject to OFO-like procedures implemented for the weekend by utilities in Colorado and Wyoming.

Several sources agreed that tentative August cash business came to a near-standstill as traders gazed in awe as futures again posted a large increase. "Those [screen] rises seem to have taken a lot of people's breath away," commented a Gulf Coast producer.

Buyers reported getting August offers Friday at $2.23-24 for El Paso's San Juan-Blanco pool and at plus 1 basis for the MRT mainline.

Due to its heavy reliance on Canadian gas, California is one of the few domestic markets that can stay isolated from large price moves at Nymex, a marketer said. Because of that, Southern California border basis quotes have collapsed as the screen rocketed higher, he said.

©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.

Copyright ©2018 Natural Gas Intelligence - All Rights Reserved.
ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus