Holiday Weekend Price Changes Are Widely Varied
The Christmas weekend market was a true hodgepodge of price movement. Friday's changes ranged from more than $2 lower in the Northern Natural Gas market area, despite a pipeline OFO still in effect after nearly two weeks, to more than $2 higher in both of Transco's Zone 6 pools. Other points were arrayed at various positions in between, but most were flat to 20 cents down.
In most regions a softer screen and the normal slump in demand over a long holiday weekend outweighed still-frigid weather to send prices lower, sources said. However, Northeast citygates had to contend with transportation constraints from the Gulf Coast as well as cold weather, resulting in substantial gains for delivered gas.
Trading was complicated by various flow periods resulting from companies taking either Friday or Tuesday off as an extra Christmas-associated holiday. Some sources said they had done most or all deals Thursday through Tuesday (or even Wednesday in a few cases), while others traded Friday through either Tuesday or Wednesday. A Calgary marketer said he traded everything through Wednesday because, like most of his neighbors, he would be taking Tuesday off for Canada's Boxing Day.
Chicago-area LDC Nicor had planned to be on holiday Friday, but had to re-open its nominations window to allow people to balance their accounts because of the Critical Day declaration, a producer said. The utility was buying new gas itself, he said.
Activity was predictably muted, as it often is going into a long weekend. There was definitely a widespread attitude of "let's get it done quick and get out of here," said one marketer. You could tell some people were forced to move gas in the Southwest because they kept selling even when prices started falling, he said. His company bought El Paso-Permian as low as $10.15 late, but sold ANR-Southwest, where the price trend was upward, as high as $11.50 late. "That's a huge spread between those two points," he said.
The market saw mostly rising prices last week due to the bad weather, but this week's winter storms are expected to be even worse, said a Midcontinent source. Also, wellhead freeze-offs have not been much of an issue so far, he added, but appear certain to make their presence felt much more emphatically this week. That could make things "very interesting" for some traders as they return to the office Tuesday, he said.
Few people were concentrating on bidweek business Friday in the rush to clear out for the holiday. However, a Texas-based marketer reported a hefty index premium for the Chicago citygate, saying he was trading Chicago for January at the GPI index plus 40-50 cents.
The Southern California border had a record-setting basis average of just over plus 651 for December, but that could be eclipsed for January, judging by the bid-ask basis spread of plus 685-715 posted by EnronOnline as of noon Friday. Other hefty positive basis spreads listed by EOL included Malin at 553-603, Transco Zone 6 at 420-520, Texas Eastern M-3 at plus 220-270, Chicago at plus 85-95 and CNG at plus 84-94. The most negative posting was for Northwest-domestic at minus 66-62.
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