West Softens While East Gains Slightly
It was a tale of two cash markets on Friday, as the majority of
price points east of the Rockies registered gains of 1 to 7 cents,
while prices to the West dropped because of the typical weekend
decrease in California power demand exacerbated by a weekend
constraint announced on PG&E's system. El Paso (non-Bondad) was
one of the pipes to fall the farthest, finishing in the mid $2.20s.
A high inventory OFO caused PG&E citygate to trade about
flat to the Southern California Border on Friday, marking the
second time in a week PG&E has put an OFO on its system which
has seriously affected the basis between the two points. Yet unlike
the one that constrained Wednesday's flow (See Daily GPI, August
4), Friday's OFO is "a pretty usual thing for them to do," one
western trader said. He added there were also rumblings of a
Southern California Border OFO planned for the weekend as well, but
nothing had been substantiated by press time Friday.
Stanfield was the premium pipe in the Rockies, one trader said,
as it followed the Nymex higher. It traded into the low $2.30s,
while CIG and Northwestern stayed flat and Kern River fell into the
Aeco prices rose again Friday, finishing the week in the low
$C/JG 3.20s. The rise is attributed to a rush in Alberta to put gas
in storage, as well as increasing ties to the rising Nymex. One
trader said sellers in the Rockies are looking to Aeco for price
direction and are unwilling to sell gas much below Alberta levels.
"Aeco [strength] is the only thing keeping the Rockies from
collapsing," the trader said.
On the other side of the country, Gulf Coast prices rose
slightly. "The Gulf was really strong from the start today," one
trader said, quoting early Tetco West Louisiana prices in the low
to mid $2.60s. "Late in the day, prices came back a bit and there
seemed to be a lot of gas out there, but for the most part Friday
was pretty strong." He said summer heat in the Midcontinent and in
the Gulf was a main reason behind the uptick.
Midcontinent prices were also up slightly as the Chicago
citygate finished in the low $2.70s and Northern Natural
Demarcation finished in the mid $2.50s.
Adding flames to the bulls' fire is the National Weather
Service's (NWS) new six- to 10-day weather forecast. While the
Northeast will experience normal temperatures, the NWS also
forecasts most of the Midwest will be engulfed by above-normal
temperatures. It also predicts that a small area in Northern Texas,
including Houston, and Oklahoma will experience much above-normal
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