Despite spring-like weather here, there and almost everywhere,this week’s price erosion came to a halt Thursday as many pointsturned in flat performances and a few managed small rallies.
Not everyone agreed on why the softness ended, but at least theywere able to suggest some reasons: strength in crude oil andheating oil futures, with crude briefly touching the $30/bbl-plusarea and settling just under $30; Wednesday afternoon’s bullishstorage report; and incremental storage injections prompted byconcern that a hot summer combined with the current year-on-yeardeficit could strain supplies.
The majority of Thursday’s increases were very small, but a fewscattered points managed upticks in the area of a nickel. Rangestended to be tighter than usual, with most less than a dime.
An aggregator found it hard to understand how Chicago citygatescould gain 2 cents to $2.56. A little cool-down is expected in theChicago area over the weekend, he said, “but it’s nothing to getexcited about.”
A Gulf Coast producer who credited the storage report forstabilizing swing prices still sees some vulnerability for the nextcouple of months, but then he expects strong summer numbers. Amarketer essentially agreed, saying that gas buyers who realizethat the futures strip “offers little in the way of relief in termsof lower prices” were propping up current prices.
The March bidweek gained little new momentum in the way of fixedprices, but a Gulf Coast trader said basis had weakened fromWednesday. Transco Station 65 was the only point he traded at aplus basis, which he pegged at 1.75-2.5. His other basis resultswere ANR Southeast at minus 4.5; TGT Zone SL at minus 2.25-1.5;Tennessee 500 Leg at minus 4-3.25; Tennessee 800 Leg at minus4.25-3.25; Texas Eastern-East Louisiana at minus 3-2.25; and TexasEastern-West Louisiana at minus 5.5-4.5.
A producer said he was seeing Transco Station 65 basis at onlyplus 1, but that likely because his deals were struck later thanthe above trader’s. The producer also reported Texas Eastern-SouthTexas at minus 10-9.5, but said he was hearing that basis hadwidened to minus 10.5-10 later.
In contrast to the Gulf Coast’s weakening basis, a marketer saidChicago basis “was stuck on plus 6 today.” He and another sourceconcurred that indexed citygates were trading at flat to plus aquarter of a cent.
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