Perceptions of whether September prices were still fallingFriday sometimes depended on the specific market. A trader in theSouthwest basins said numbers bounced around a bit Friday butessentially had hit bottom late Thursday. But another source saidChicago citygates continued to fall to a low of $1.62.
As an indicator of how far some points have been dropping asbidweek activity proceeded, a marketer who had been doing SanJuan-Blanco deals in the mid $1.70s Tuesday was averaging $1.58 inpurchases there Friday. An MRT trader wound up with an even biggerrange: a mainline deal last Tuesday at $1.81 had yielded to low$1.60s pricing Friday.
A trader who saw Consumers Energy basis trading about a pennyabove MichCon’s thought it was “the same story this month” withConsumers getting a slight premium because of the surplus storageon the MichCon system.
Buyers were still trying to slam September prices down furtherFriday, a producer said. “I guess they’re not happy enough with thelow prices we’re offering them now. People were fighting over aquarter of a cent.”
On the other side of the coin, so to speak, an end-usercommented, “We can’t gloat too much [over low gas prices] becauseit will turn back on us very quickly.”
A marketer commented that bidders are “bottom-fishing” and thesellers are getting sick of calling and chasing a market that mightnot be there. This is setting the stage for a standoff in theaftermarket where Mother Nature may decide winners and losers.
The weakness in the late-August incremental market intensifiedFriday as most downticks outside the Rockies and California were indouble digits, with a few exceeding 15 cents. One source said manyGulf Coast cash-out prices are expected to be in the high $1.70s.That creates an incentive to go long on cheap swing gas at the endof the month, at least up to the tolerance level of any invidualpipe, she said. With Gulf prices on either side of $1.60 Friday,traders could realize tidy profits by getting cash-out prices fortheir positive imbalances.
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