Rockies/San Juan Upticks Stand Out in Flat Market
Lacking little new input from weather or futures, the cash market decided to take it easy for the most part Tuesday. Flat to slightly higher pricing dominated in most areas, with most of the larger gains of about a dime or more occurring at Rockies/San Juan points.
Former Hurricane Keith had been downgraded all the way to a tropical depression as it trudged slowly to the west-northwest across Mexico's Yucatan Peninsula. The National Weather Service expects the storm to regain hurricane strength after emerging into the southern Gulf of Mexico sometime today, but its anticipated tracking likely would take Keith to the west of most Gulf production facilities.
However, as a precaution Shell Oil said it planned evacuation of 116 employees from a drilling rig in the Alaminos Canyon area in the western Gulf and another 200 non-essential workers from the deepwater Garden Banks area of the central Gulf.
News that Vector Pipeline's scheduled start-up would be delayed by a month until Dec. 1 (see related story in this issue) only had a minor impact in day trading at the Dawn (ON) Hub, which was up a couple of cents, a marketer said. But the overall winter strip for Dawn was rising, she added, and November numbers were higher than those for December. Vector was designed to provide extra takeaway capacity for the gas that will begin arriving at the Chicago citygate when Alliance starts operations Oct. 30; Vector will transport to Dawn and also provide access to Upper Midwest markets and storage.
A Canadian cold front is pushing southward into the Rockies and Midwest, raising prospects for heating load in those markets as the week goes on. However, late-week temperatures in the Northeast will not be as low as some were expecting, one trader said, so any heating load there will be only moderate.
A mainline leak on Florida Gas Transmission in southeast Texas (see Transportation Notes) had virtually no impact on flat pipeline prices, a marketer said.
PG&E citygates saw the day's only significant decline of about a dime, which made the Southern California border once again command a premium to the PG&E citygate, an unusual price relationship that was in effect for much of the summer. The two points had traded at near parity Monday, but in October indexes the border ($5.57) trailed the citygate ($5.91) by more than 30 cents.The new reversal was mainly a case of PG&E, while not issuing a high-linepack OFO, projecting linepack that was bumping up against its upper target levels, a large aggregator explained. Power generation load in California is fairly benign for now, he said, and outages at western nuclear plants are not making much of a difference to the gas market.
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