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Mild Weather Again Weighs Heavily on Prices
A popular Mark Twain quotation goes, “Everybody talks about theweather but nobody does anything about it.” Well, utilities andend-users don’t want anybody doing anything at all about theweather because it was the primary reason (again, for the umpteenthtime) for prices to return to double-digit descents Friday in mostcases.
Only a few points, mostly Northeast citygates, dropped by lessthan a dime. An approaching cold front helped explain why theNortheast was a bit firmer than other markets. However, there stillis nothing like really serious winter weather in sight anywhere,traders said. Also, a softer futures settlement and the demandslump over a weekend played a role in falling cash prices, theysaid.
A couple of Rockies pipes, CIG and Questar, recorded a fewsub-$4 quotes for the first time since the end of September.
San Juan and Permian/Waha took the day’s biggest price hits ofabout a quarter or more as weekend demand fell sharply at theSouthern California border and PG&E citygate. In addition to ElPaso maintenance constraining Southwest basin capacity,Transwestern was allocating border deliveries at Needles Fridaybecause of nominations exceeding capacity by about 40,000 MMBtu/d.Waha and Permian gas had almost no intrastate Texas utility load totake up the slack, a marketer said.
One trader expected Sumas to extend its premium over domesticprices after Northwest issued an entitlement for the northern halfof its system, effective Saturday (see Transportation Notes).However, the weekend spread for the two points actually narrowedinstead to about a nickel after having been just over a dimeThursday.
Swing activity predictably was diminishing as many traders hadalready baseloaded the rest of their October positions to focus onNovember business. Just as predictably, the bidweek numbers beingbandied about got softer along with the screen, althoughfixed-price deals remained on the scarce side. A marketer reporteddoing Houston Ship Channel trading at minus 2.5-1 basis.
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