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Cash Trading Inches Lower Giving Back Recent Gains
Cash prices slipped lower in most areas yesterday, giving backweather-driven gains earlier in the week. Sources blamed theweakness mainly on the inability of the June futures contract tomuster considerable gains, along with forecasts of moderatingtemperatures going into the weekend. With the exception of minorgains in Sumas and Stanfield, most trading areas lost between 3-5cents Tuesday.
The upward pressure on southwestern and Rockies prices, whichresulted from supply constraints on the El Paso system in the SanJuan Basin, only slightly eased-off. Prices in the basin wereexpected to take a bigger fall as curtailments were to be cut byalmost half today. However, an unauthorized overpull penaltyinstituted by El Paso on its system late Monday kept prices aloft,traders said. Some late Blanco deals were reported as high as$2.07. The overpull penalty was suspended late yesterday afternoon.
The scheduled maintenance at the El Paso Blanco facility isexpected to curtail only 500 MMcf/d of supplies from the planttoday. This is down from curtailments of 890 MMcf/d for the firsttwo days of the week. However, “we didn’t suffer the full impactthat was potentially there because of the other plants that wereoperating,” said El Paso’s Bill Healy, director of operationcontrol. Healy said all of the other big coal seam plants – withthe exception of Burlington Resources’ Val Verde, which comesthrough on some of the compression there at Blanco – are stillproducing. Throughput out of the San Juan Basin on El Paso Tuesdaywas 2,140 MMcf/d, down from the usual 2,700 MMcf/d.
Midcontinent and Gulf Coast prices opened on the down side butinched up in late trading, sources said. “General Midcontinenttrading tried to push in the $2.08-9 level early, but later in theday, the buying came in and substantiated it up to at least the$2.10-11 level,” said a Midcontinent trader. He reported a latetrade on NGPL at $2.11 and a $2.10 on ANR. Sources in both regionscited electric generation as the reason for the late uptick. “Allthe power plants were pulling hard to take advantage of the cheapgas and whoever waited had to pay a little more for their supply,”one marketer noted. He thinks it is likely for cash to open alittle higher tomorrow in light of the increased generation demand.
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