A Houston-based producer summarized his gas market outlookWednesday: “It’s pretty ugly for August, even uglier forSeptember.” Although end-users might consider the picture moreattractive, all could agree that prices were dropping for bothincremental August and September bidweek business.
Quotes for today’s flow were down across the board, withdeclines generally ranging from a nickel to a dime. The futuresscreen’s third consecutive decline of the week, for a total drop ofnearly 20 cents since last Friday, was an obvious drag on cash. Aspreading cold front and Hurricane Bonnie were helping to reduceair conditioning load in the Northern and East Coast market areas.
A Gulf Coast producer said the morning was pretty hectic as hiscompany continued to recover from a pipe rupture at a platform onthe Dauphin Island Gathering System. The rupture affected suppliesgoing into Koch Gateway and Florida Gas Transmission. “It wasn’t somuch that we were busy selling, we were just moving volumes fromone pipe to another,” the producer said.
September bidweek prices obviously were paying heed to the weakscreen. A producer who had sold Houston Ship Channel gas at $1.87on Tuesday said he was able to get only $1.75 Wednesday. Andalthough morning deals at the Southern California border werequoted in the mid $2.00s, a marketer said they had gotten as low as$1.98 by afternoon. Similarly, a marketer reporting Permian and SanJuan-Blanco packages in the high $1.60s and low $1.60s respectivelysaid prices were falling steadily as trading proceeded. Anothertrader said $1.60-62 Northwest-Opal numbers in the morning fell to$1.58-59 in the afternoon.
It’s like pulling hens’ teeth to get rid of September gas, amarketer told Daily GPI. He expects more gas than usual to betraded on a swing basis during this bidweek. And a producercommented, “There is nothing good if you are a seller, and thereare a lot of sellers out there.”
An electric utility in the South said it had so much excess gason its hands that it will be a net seller for September.
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