Hot weather appeared to be the primary driver of gas pricesMonday. When you’ve got it, as regions from the Rockies westwarddid, quotes went up by about a nickel at many points; when youdon’t have it, as the relatively balmy Midwest and Northeast marketareas didn’t, prices were flat to down as much as 7 cents.
Despite most Calgary traders being off for the Heritage Dayholiday (which celebrates the cultures of other nations, one sourcesaid), intra-Alberta prices plunged about C15 cents to the lowC$1.80s in the light activity that did occur. The announcement ofa month’s delay – to Dec. 1 – in the expected in-service date ofNorthern Border’s Chicago expansion project and the fact that NOVAlinepack was strong tended to undermine the Canadian gas marketstructure.
It looked as if Midcontinent prices tried to struggle upwardsearly in the morning, one trader said, but it was a no-go situationin the face of Chicago citygates falling more than a nickel intothe high $1.80s. With Midcontinent pipes only about a dime underthat, it made transportation economics unattractive, he said. Onlythe support of Western upticks kept the Midcontinent from fallingany further than it did, the trader went on. In a pinch, he said,it might have been feasible to haul Midcontinent gas to San JuanBasin, where prices were almost a nickel higher.
A marketer also found transportation differentials between theGulf Coast and Northeast unappealing. It was easy to understand whysome Transco Zone 6 deals were going below $2, she said; “nobodyneeds the gas.”
In an unusual convergence, Waha, Permian Basin and San JuanBasin were priced virtually the same around $1.83. And Katy wasbarely a couple of cents over Waha, again making it unlikely thatany gas was flowing east across Texas. San Juan could theoreticallybe as much as 3 cents higher than the Permian but no higher, onesource noted, because that is the basins’ difference in cost tomove gas to the California border.
“It’s still hot as hell here in Texas,” but the electricutilities just can’t burn much more gas than they already are, amarketer said. A fuel buyer for one of those electrics concurred;some gas-fired units may shut off during off-peak periods, he said,but currently peak power periods last almost all of the daylighthours and into the evening.
Maintenance at the Whitney Canyon Plant is still keeping someRockies supply off-line, a marketer said, but that is due to endaround Wednesday or Thursday. Meanwhile another marketer was amazedto see his mid $1.80s deals at the Opal hub at virtually dead-evenbasis to Henry Hub.
Tropical Storm Alex fizzled out over the weekend, leaving nosignificant storm activity on the Atlantic horizon.
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