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Futures Crash, Lack of Weather Bring Cash Down
A crash-and-burn Nymex session in both the natural gas and crudeoil pits depressed both September and October cash prices Thursday.Only western swing quotes managed to avoid declines that weregenerally around a dime or greater.
Even most western numbers weren’t much stronger than flat in thefading September market. The points with substantial increases inthe vicinity of a dime were the ones tied to Western Canadasupplies (Sumas, Stanfield and intra-Alberta) and SouthernCalifornia.
The Sumas-domestic spread on Northwest widened again to nearly80 cents as the pipeline began an entitlement against overtakesnorth of Kemmerer, WY (see Transportation Notes). That kept U.S.Rockies prices mostly flat while boosting the value of Sumassupplies by a little more than a dime. Intra-Alberta prices got aboost due to NOVA tightening its imbalance tolerance to combatfalling linepack due to low field receipts, a Calgary marketersaid.
Cash softness was chiefly due to cratering gas and crudefutures, one source noted, but also traders can’t ignore the factthat there is virtually no weather load now and unlikely to be anythrough early October. And the first large storage injection reportin a while, which got a delayed bearish reaction on the screen, mayhave reassured some that the situation isn’t as drastic as it mayhave seemed, he added.
Buyers, especially end-users, who waited until Thursday to makeOctober purchases were rewarded for their patience with fallingprices. A marketer who had seen San Juan numbers as high as the low$4.70s earlier this week said the market was down to the $4.40sThursday.
An end-user who indexed most deals planned to get at least onefixed-price package, but said as of mid-afternoon “I’m sitting onmy hands and waiting to see how far things will come down.” He wasgetting Houston Ship Channel offers around $5.10 Thursday comparedto $5.28-29 earlier.
There was little news of significance about Hurricanes Isaac andJoyce, but Tropical Depression 15 had formed just off the coast ofHonduras, the National Weather Service reported late Thursday.
Although the announcement was made too late in the afternoon toaffect most trading, some Southwest capacity to California will bereturning today. Transwestern said it expected to complete Station3 maintenance Thursday night, restoring West of Thoreau capacity to1.09 Bcf/d.
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