A delayed and abridged trading windup in the March futures contract(see details in futures and news stories) Wednesday put a large crimpin the progress of bidweek activity, sources told Daily GPI. While tosome it was just an annoying wait, others complained of having totrade in the dark. A producer said the cash market had been renderedvery quiet by the phone outages that caused Nymex to shut down theexchange temporarily. “For a while we didn’t even know whether ourorders were filled,” he said. “It’s hard to take a cash position ifyou are unsure where your hedge lies.”
Others said the screen uncertainty caused the bidweek market to”die” on them. “It’s a bummer, really cramps our style,” accordingto one Texas producer. Another trader felt March business was”frozen in place” until late in the afternoon when the screenresumed activity for a quick settlement period.
The delay probably means a lot of volatility today, especiallybecause of the late screen run-up into the high $2.20s thatapparently resulted from a lot of traders scrambling to bail out ofshort positions quickly, a marketer said. Today obviously will be”the heavy day” for fixed-price deals, he added.
Even without the impetus of rising futures, March quotescontinued to creep higher in many markets Wednesday. Basis got alittle stronger again at the Houston Ship Channel and Chicagocitygate, one trader said, and fixed-price Chicago deals were beingreported in the low $2.30s. Rockies gas was selling in the $1.90area after being in the low to mid $1.70s last week, a marketersaid. Southern California border numbers had jumped into the mid$2.30s after being quoted in the high $2.20s Monday, and Malindeliveries were starting to top $2, another trader said.
It’s a bad market to be a buyer, one source said. Gulf Coastbasis is tightening, index premiums are getting a little bigger,and sellers “are finding they can nearly name their price,” he wenton. He was hearing rumors that LDCs are looking at March inrelation to the rest of Nymex’s 12-month strip “and buying anythingthey can to stick it in the ground” (storage injections).
Incremental late-February prices were rising as fast or fasterthan March numbers, with several points again seeing late spikesdue to balancing concerns or short supply squeezes. Most of theincreases tended to be on the order of 2-6 cents, but Malin Line400 ran up about a dime.
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