The cash market appeared to be slipping into a holding pattern Wednesday with close-to-flat prices prevailing at virtually all points. Only a few points, nearly all in the West, saw prices move by a dime or more. Flat quotes were common in a market that was approximately evenly divided among losses of up to about 15 cents and gains that also ran as high as about 15 cents (Questar was an exception with an increase of about 30 cents).
Several Rockies points were out of step with overall market trends again, but instead of realizing the largest losses as on Tuesday, this time they tended to rally for the largest increases.
There is still a little heating load to support prices with temperature lows in the 40s continuing to be forecast for Thursday in the Northeast, Upper Midwest and Rockies, but it's relatively light. Meanwhile, the power generation demand for air conditioning purposes that has developed in the South is still around, but that is receding a bit. For example, the forecast high of 87 degrees Wednesday in Charlotte, NC, is expected to drop by about 10 degrees Thursday. Only a few parts of the South are seeing temperatures get above the low- to mid-80s.
Further evidence of declining cooling load in the South comes from an Overage Alert Day notice by Florida Gas Transmission for Wednesday not being extended into Thursday. Florida Gas Zone 1 fell about a dime, while Zone 2 and 3 and the Florida citygate were flat.
Tuesday's drop of nearly 15 cents by June futures had relatively little impact on cash numbers Wednesday. The screen has essentially neutral guidance for Thursday's cash trading with a minuscule rally of 1.2 cents Wednesday.
The Southern California border recorded one of the day's biggest losses after SoCalGas issued a high-linepack OFO for Thursday.
A Houston-based Gulf Coast producer said he figures that the market will continue to drift mostly sideways "until some event happens," such as an extra-big Nymex move up or down or a radical change in weather to either much hotter or everywhere getting mild again and sending prices much lower. There still isn't much significant air conditioning load showing up in the South, "except at my house," he quipped. Asked if he was encountering any significant pipeline problems, the producer answered, "Not any more than usual."
Calling it a "pretty quiet" market, a western trader noted the overall flat pricing and said basis spreads have been consistent day to day recently. It hasn't gotten very hot yet in inland California, she said, but her company was finding "decent load" there. She noted that the PG&E citygate premium to the Southern California border had widened from 36 cents Tuesday to about half a dollar Wednesday because of the SoCalGas OFO.
Ron Denhardt of Strategic Energy & Economic Research expects an 85 Bcf storage injection to be reported for the week ending April 27. Bentek Energy weighed in with a projection of an 86 Bcf build. And the Reuters survey of 23 industry players found an average expectation of an 81 Bcf injection. Estimates ranged from 65 Bcf to 93 Bcf, the news service said.
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