Weekend Market All Mixed Up; Keith Debuts as Storm
In the hodgepodge of trading for split weekend periods Friday, little trend was evident other than the October aftermarket was starting out below indexes in nearly all cases. However, a fellow named Keith could play a large part in reversing the generally softer market as early as today.
While Hurricane Isaac and Tropical Storm Joyce remained well out in the Atlantic and inconsequential to the gas market, of much more immediate interest was the strengthening of Tropical Depression 15 into Tropical Storm Keith in the northwestern Caribbean Sea. Keith was about 300 miles south of the western end of Cuba and drifting northwestward late Friday afternoon, prompting Mexico to issue a hurricane watch along the east coast of the Yucatan Peninsula, the National Weather Service said. NWS expected Keith to turn more toward the north-northwest and potentially become a hurricane over the weekend.
Traders had several fronts to cover Friday: taking care of any last-day October baseload business along with doing some swing deals for Saturday-only and others for Sunday-Monday. Quite a few had taken care of the split weekend issue by trading Thursday for Friday-Saturday flow.
Chicago was very quiet for the last day of September with little activity, a large marketer observed. He and a producer, however, agreed that the Oct. 1-2 period was marked with considerably heavier trading and a volatile price slide. The marketer, who reported citygates starting at $5.40 and dropping into the $5.10s, said it seemed like the supply situation was very long, and coupled with very moderate Midwest weather for the weekend, that had prices falling throughout the session. However, the producer, after making his last sale at $5.17, said he detected a small late rebound into the low to mid $5.20s by buyers caught short.
Similarly, a western trader said PG&E citygate gas for Sunday-Monday began the day trading flat to Sept. 30 numbers, but then fell off as extra supplies became available and extra buyers didn't.
A few frost predictions for Saturday morning failed to keep Northeast citygates from softening because temperatures were expected to rebound as the weekend went on. Early-October prices in the region tended to be a few cents down from Saturday numbers.
The Rockies/San Juan market was a rare one to see prices rising from Saturday into early October. The firming likely was due to area transportation constraints, one real and the other a false alarm, one source said. Transwestern continued to allocate its San Juan Lateral due to nominations exceeding capacity. However, a 16-hour outage of El Paso's Line 1100 from Eunice Station to Pecos River Station that had been scheduled for Sunday wasn't postponed by the pipeline until Friday afternoon, well after the day's swing business had been completed.
Despite Northwest's entitlement for the northern end of its system, domestic gas actually showed a bit of strength for the weekend, a marketer said. The San Juan-Rockies spread was widening dramatically, he continued, so many traders saw that as a good opportunity to take more Rockies gas south into El Paso.
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