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Mixed Pricing Returns with Near-Flat Quotes
The mixed prices that dominated last week’s market were back Wednesday. Most quotes were less than a dime up or down from unchanged and reflected a moderate bias to the downside. Market influences were largely the same as on Tuesday: a decline in cooling load since the week began and screen weakness the day before.
All of Wednesday’s gains were in single digits, except for a somewhat aberrational advance of nearly 40 cents at Transwestern-West Texas. Losses ran as high as about 40 cents.
The cash market signal from Nymex was negative again Wednesday, but the drop of 3.2 cents in natural gas futures was quite a bit less than Tuesday’s 19.6-cent dive. The petroleum futures complex also was weaker.
The dips in air conditioning-driven power generation load are occurring primarily in the Northeast, Midwest and northerly sections of the West. Hot weather remained the norm in the South, Southwest, Midcontinent and portions of the central Plains. Higher temperatures are slated to return to the Northeast and Midwest by Friday.
It was unlikely to be significant, but a bit of heating load may have surfaced in the Northeast. According to The Weather Channel (TWC), overnight lows in the 40s were due in interior parts of the region, and some mountainous areas could be under frost or freeze warnings Thursday morning. However, heat and humidity will be back throughout the Northeast Friday, TWC said.
Stormy weather Tuesday evening in the Empress, AB area caused damage that forced the shutdown of an unknown number of extraction plants that feed processed gas into TransCanada’s mainline. The biggest impact was to BP Canada’s facility, largest of the Empress plants. A bulletin board posting Wednesday said TransCanada was bypassing the plants for the time being, which would result in higher heating values for downstream deliveries on the mainline and the Foothills Saskatchewan line. A pipeline spokesman said the outages did not cause any throughput constraints or operational issues. Intra-Alberta prices were flat Wednesday.
A spokeswoman would not comment on the BP Canada plant’s normal processing volumes. The company was due to release a statement about the outage late Wednesday, but it had not been received by NGI‘s deadline.
A marketer described it as “very comfortable” around 80 degrees in the Upper Midwest Wednesday. The region will get hot Friday and Saturday, she said, then cool off again toward the end of the weekend.
A Gulf Coast marketer said daily trading was quiet, with “not many buyers around.” Most of the July deals he’s done so far have been indexed, but he reported these basis trades, all done in Texas Eastern’s production area pools: East Louisiana, minus 4 cents; West Louisiana, minus 11 cents; and South Texas, minus 25 cents. He explained the big differentials as being due to high Texas Eastern fuel charges between the zones. There also is a capacity constraint issue, he said.
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