Cash prices took a cue from the futures screen Thursday andpulled out of their headlong dive that has dominated the marketsince Monday. But sources considered the general leveling off ofprices, which leaned slightly to the softer side, as onlytemporary. Noting that Northern market areas already have startedcooling off from their recent temperature heights and that thecooling trend is expected to spread further this weekend, manytraders expect the general downturn to resume today.
One of Thursday’s most significant declines occurred at TexasEastern M-3, which lost considerable ground in comparison toTransco Zone 6 citygates. And Zone 6 deliveries into the New YorkCity area continued to command a premium. A marketer said hercompany was glad to have firm capacity through the Linden, NJ,bottleneck on Transco. “Since we’re paying the demand charges forTransco FT, I’ll leverage its value to the hilt while I can,” shesaid.
Only Houston Ship Channel and premium Louisiana pipes are leftclinging to $2 or higher pricing in the Gulf Coast, and $1.90snumbers are now more dominant in the region. The recent softeninghas left the Gulf Coast and Midcontinent 30 cents or more belowJuly indexes.
Waha isn’t too popular a trading point lately, one source said.With mid $1.90s Waha price levels only 2-3 cents under Katy, itmakes sense to buy on the east end of Oasis rather than the westend, he said.
A marketer who saw Southern California border prices continue tosink a little over a nickel into the mid $2.20s commented, “TheCalifornia market has gone from great to [terrible] in the space ofabout three days.”
Several sources noted that incremental activity is slowing downas traders start mapping strategy for August. A Southwest trader”trying to get a head start” on next month’s business reportedfixed-price deals in the mid $1.80s for Permian Basin and at$1.76-77 for San Juan-Blanco. Another source was hearing Wahanumbers in the $1.90 area. A buyer was getting Southern Californiaborder offers in the high $2.20s earlier this week but said theyhad dropped to either side of $2.20 by Thursday.
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