The producer who expected Midcontinent prices to be back aroundNovember indexes “fairly soon” (see Daily GPI, Nov. 3) didn’t havelong to wait. In fact, he underestimated the cash market as biggains across the board-except for intra-Alberta-Tuesday carriednearly all points back to index levels or higher. Rises between 15and 35 cents dominated the market.
“A little bit of winter” in the major market areas of theMidwest and Northeast was why cash tended to seriously outpace thescreen’s relatively measly increase of barely a dime, aHouston-based aggregator said. But he and other sources agreed thatthe extensive weakness of the initial November aftermarket was alsoa major factor. There was almost nowhere else to go but up, onetrader said.
The early November weakness, in turn, largely was a result oftraders who had gone into the month short anticipating thatweakness, a marketer said. But approaching colder weather didn’tallow them to enjoy their advantage for long, he added.
The East, which had been lagging the overall market and keepingit depressed, has stepped up into a major buying mode and is nowleading the rally, according to a Texas trader. Naturally the GulfCoast and Midcontinent followed along with some help from thescreen, he said. A western trader attributed that region’s upticksmostly to short-covering, but added the “shorts wouldn’tnecessarily have been so quick to step up their purchases if theyhadn’t been scared by the strength in the screen.”
Intra-Alberta, about the only point above index (C$2.56) Monday,went against the grain of the overall market with a slide to theC$2.40 area, a marketer said. The softening resulted from NOVAswitching its daily imbalance tolerance to -20%/0%, which helped todissuade shippers from packing the pipe and represented a180-degree turn from last week’s tolerance, he said.
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