Aside from a mostly weather-related boost to cash prices inCalifornia and a supply-related recovery in San Juan prices, Juneincremental trading finished its last trading session flat to downa couple of cents almost across the board. Moderating temperaturesin areas experiencing record setting readings over the weekend andreduced end-of-month activity resulted in the minor softness.
While most incremental price drops were minor, Bidweek pricescontinued to trade in relatively tight ranges. Ambiguity abouttemperatures for the month of July has caused many to resort toindex and Nymex basis related pricing. However, it is safe to saythat July fixed price numbers have registered sizeable gains fromtheir June counterparts. Midcontinent, Gulf, Northeast and Midwestprices look to surpass June levels by 30 cents or more in somecases. Western prices made more modest gains with some pointsposting 20-cent gains or more.
Leading the day’s events were cash prices at the SouthernCalifornia border which inched up about 14 cents as warmertemperatures finally made their way to the area. “It is just nowstarting to warm up in our area and should be warm most of thisweek,” said one trader who reported a border package at $2.22. SanJuan-Blanco pool prices also recovered almost half of their 23-centloss from Friday. Offsetting this recovery was the continuation ofemergency repairs on El Paso’s Line 1100 downstream of GuadalupeStation, which is limiting deliveries to the Waha area (seeTransportation Notes.)
In the South, “We did have a little bit of rain which cooledthings off a bit and prices were a little down today,” one GulfCoast marketer said. However, “this is only a small temporary fixas heat is coming right back.” According to the National WeatherService, record heat is expected to continue to fry much of WestTexas and the adjacent High Plains northward into Kansas throughthe holiday weekend. Records may also tumble in the easternCarolinas, southern Georgia and North Florida.
“Fundamentals out there point for the market to be flat to up,so don’t look for [the Gulf Coast market] to sell out too muchbelow mid-30s between now and the 5th,” one trader advised. Heblamed some of Monday’s weakness on the idea that people were justtrying to get July out of their way and not many were worried aboutthe last day of the June.
On the other hand, a Midcontinent trader said there is a gooddeal of uncertainty surrounding which direction the Julyaftermarket will take, especially following a weekend ofhistorically low demand. “If we see continued above-normaltemperatures we should plod up slowly, but moderating temperatureswould bring prices back toward $2.00 just as fast as they ran up,”he said.
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