May cash prices made a stab at climbing a little higherWednesday, and indeed, one trader said he was “still struggling” tobuy Sonat gas with offers in the low $2.30s. But other sources,while agreeing there was an early push for higher prices, said thenumbers were starting to soften again in the afternoon. “Everybodywent to lunch and then things fell apart,” as a marketer put it.
Two reasons were cited for the late fallback: the weakening ofthe June futures contract, and a bearish AGA storage report of 64Bcf in injections. Before the report came out, an end-user said hehad been hearing estimates of 40-50 Bcf. Last week’s report of 54Bcf was considered bearish, said another source, so this one “mustbe all the more so.”
“[Tuesday], Chicago was looking very strong,” said a marketerreporting trades done as high as $2.41-43 at that time. “This hadpeople in a little bit of a panic as the market moved higher.”Wednesday was quite a different story, he went on. Citygatesstarted the morning in the high $2.30s and fell to the mid $2.30s.
One source thought it interesting how closely Katy traded toHouston Ship Channel, where there is usually a spread of 3-4 cents.He wasn’t sure why but said at times the bids were half a centapart to flat.
Rockies prices are strong again in the mid to high $1.90s, saida buyer, adding that much of that gas was being sourced to San JuanBasin.
As usual, trading for the last day of the month was light andmostly an afterthought since so many people had based-up April gaspreviously in order to clear the decks for May bidweek action.Although a few points registered as flat, many-especially in theGulf Coast, Midcontinent and California-saw gains of 2-4 cents. TheSouthern California border and PG&E citygate were particularlystrong with increases of a nickel or so.
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