People saw the screen start higher Monday morning and “everybodywas off to the races,” a Midcontinent marketer said. Priceincreases were across the board but by widely varying amounts, evenamong neighboring pipes in a region. Everything basically followedthe Henry Hub futures contract, according to a Northeast trader.However, he and other sources agreed that virtually every point wasbacking off near the end of activity. “People just quit buyingafter the screen run-up,” he said.
Most of Monday’s upticks were between a nickel and 15 cents. Butto illustrate some of the extreme contrasts popping up, Kern Riverin the Rockies was rocketing upward by nearly 20 cents to surpassneighbor CIG-DJ Basin, which barely eked out a penny gain. Onesource attributed the Kern River strength to California demand,where the Los Angeles area was heating up and one forecaster waspredicting parts of Central California would hit the 90s.
A return of record-setting heat in Texas and hot weather in theSoutheast lent some fundamental support to the cash strength.Although Texas had cooled slightly Monday from a sultry weekend,temperatures remaining in the 90s had Katy and Houston Ship Channeltrading at premiums of 3-5 cents to Henry Hub, and Waha was in theunusual position of having prices only about 2-3 cents under theHub.
The state’s soaring air conditioning load for natural gas wasintensified when one of Houston Lighting & Power’s1,250-megawatt units at the South Texas Nuclear Project was cut to14% of capacity over the weekend.
However, one Texas trader didn’t think the nuke outage had allthat much impact on the gas market, since he understood HL&Phad turned more to buying emergency megawatts in the ElectricReliability Council of Texas rather than radically ramp up gaspurchases.
An aggregator thought a large part of his El Paso-Permian andTranswestern-East of Thoreau sales in the low to mid $1.90s washeading east to take part in the Texas intrastate market.
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