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Canada Higher, Northeast Lower Amid General Flatness
Most cash prices were flat to a few cents higher Wednesday, butthere was considerable variation among specific market areas. Heavydrafting of the NOVA system led to increases of a dime or more inintra-Alberta quotes and at such related points as Sumas andStanfield. On the other hand, Appalachia/Northeast points werefalling by about a nickel or more after Northeast citygates haddisplayed the greatest price strength earlier in the week.Temperatures remained above freezing for the most part in theNortheast and Midwest, and warmer weather is predicted to startmoving in today.
An essentially flat gas futures screen gave little guidance tocash. However, some sources thought the strong push higher by theDecember crude oil futures contract, which added 90 cents to settlewell above $26/bbl, may have provided a psychological boost forphysical gas. It was the first time for crude to trade over $26since early 1997.
Storage inventories continued to build last week, as AGAreported a net of 9 Bcf in injections. A marketer said he had beenexpecting a slightly larger figure of 12 Bcf. Weather was so mildlast week, he added, that most traders had little choice but toinject whatever gas they could.
Despite mild weather continuing in Calgary, it was NOVA’sradical turnaround in daily imbalance tolerances over the pastcouple of days (see Daily GPI, Nov. 17) that caused rising Canadianprices, one source said. Apparently linepack was quite high overthe weekend, she said, but border points started drawing more gasaround Tuesday, causing the tolerance to change swiftly from 0/-20%Monday to +20%/0 Tuesday afternoon.
Hurricane Lenny is a very strong one for so late in thehurricane season but remains no threat to Gulf production. It waspunishing the islands of the northeast Caribbean Sea Wednesdayafternoon, after which it was expected to move out into theAtlantic and fade away.
December basis is looking rather weak for a winter month, oneNortheast trader said. He reported doing a few December dealsalready at plus 15 for Columbia-Appalachia, plus 18-20 for CNG,plus 45.25-50 for Texas Eastern M-3 and plus 57-58 for Transco Zone6-NYC.
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