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Cash Prices Ride the Bull, Continue Upward
Cash prices started the new week on an upward note, largelymotivated by an early Nymex run-up and forecasts of colder weatherfor some major market areas. Except for Northeastern markets, spotprices at most trading points registered gains ranging anywherefrom 1 to 6 cents in the Gulf Coast area to more than 20 cents inCalifornia markets.
“I think it was mainly a combination of a squeeze and ashort-lived run-up on the screen early this morning,” said a GulfCoast aggregator, describing some of the strength in cash. Inaddition, he said many pipes may have been short because of lastweek’s strong incremental demand. “It just seems that there are alot of short players out there that are also preparing for moreweather. There’s plenty of normal and below normal weather coming,and I believe cash is going to hold.”
A Rockies trader said prices in the region were very strongMonday, despite about 90 MMcf/d of gas being backed-up at Opalbecause of a scheduled maintenance just downstream of the plant.However, “that gas was absorbed in a heartbeat.” He said a lot ofthe run-up in prices was a reaction to snow storms in the regionand colder weather out West. “This boosted incremental demand,especially from LDCs needing to fulfill peaking loads,” he added.Most Rockies pipes traded about 15 cents more than weekend levels.
A neighboring California marketer echoed the point about highutility demand, saying it sent prices in the region soaring morethan 20 cents and was a factor causing PG&E to declare an OFObecause of low inventories on the system (see TransportationNotes).
Aeco day prices slipped to the low C$2.30s because of highlinepack in the province, sources said. “It seems everyone ispacking the line in anticipation of the higher prices. That iscreating an overabundance of supply and prices are actuallyfalling,” one source said.
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