Even with continuing mild weather and an indifferent screen, theEast joined the West in a united front of rising prices Wednesday.Gains were fairly uniform across the board, ranging from about anickel to a dime. CIG, which had been lagging considerably behindother Rockies pipes Tuesday, was playing catch-up Wednesday with anincrease of a little more than a dime after an eastward-moving coldfront blanketed much of the state of Colorado in snow.
“What’s going on?” wondered an East Coast utility buyer. “We’vegot no significant cold weather here and futures isn’t going muchof anywhere, but our prices are going up. What happened to allthose people who were saying earlier this week eastern prices weredue to fall?”
What happened, indeed? Other sources also had no rationale forwhat arrested a week-long decline in Northeast citygates since theyspiked to around $4 in swing trading on the last day of November.”Storm hype?” suggested one, facetiously.
At least the West still had some fundamental support on which tobase its ongoing price increases. The cold front had reached thePlains states Wednesday and was leaving temperatures in thevicinity of freezing in its wake. Western prices jumped higherinitially along with the screen but then subsided a bit later, amarketer said. San Juan Basin supplies were still on the short sidefrom wellhead freeze-offs, he said. The shortfalls showed signs ofstarting to diminish but were still having an impact, he said. Butthe completion of engine replacement at Kern River’s Muddy CreekCompressor Station erased a constraint at Opal, the marketer added.
A trader who saw prices drop about a nickel from the day’sinitial high points in South Texas and at Katy and Houston ShipChannel thought it significant that he was being offered storagegas by two big players who had been sitting on their storageinventories since September. “Because of where it was (JeffersonIsland, Moss Bluff and Katy), we didn’t buy any,” he said. Butnoting the weak winter market outlook in recent days, he saidpossibly they were following a “use it or lose it” philosophy in anattempt to avoid lower prices later, he speculated.
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