Cash prices returned to a climbing mode Friday, and in theprocess won more converts to believing in a fundamentally stronggas market this spring and summer. Although Western gains tended tolag a bit behind, most increases were between a nickel and a dime.Most of the double-digit gains occurred in the Gulf Coast,Appalachian and Northeast market areas.

There was an up-down-up pattern at several Gulf Coast points, anaggregator said. For example, Henry Hub started around its peak of$2.53, later fell to the high $2.40s but then made up the lostground all the way back to $2.53, she said. Another source thoughtANR-Southeast in the low $2.40s was trailing other Gulf pointsbecause it was “super long on gas.”

Rises at the California borders were due to last week’s electricderegulation along with weather volatility, one source said. “It issnowing [in California] when it’s not supposed to,” she said. Amarketer noted that cold weather wasn’t confined only to thenorthern areas. Also, he said, PG&E (the utility) was a bigbuyer not only at the citygate but at Topock. “That is unusual forApril,” the marketer added.

The currency differences notwithstanding, Canadian prices moreand more are starting to look like their U.S. counterparts. Quotesfor intra-Alberta and Westcoast Station 2 rose to the C$2.30 area,although sources said there was a late price retreat in Alberta. Amarketer said gas was flowing west from Alberta into BritishColumbia to accommodate strong cold-weather demand in both BC andthe Pacific Northwest.

One source reported already doing intra-Alberta deals for May inthe mid C$2.10s.

Although a lot of talk last week about the initial Aprilaftermarket firmness centered around the “following the screen”clich‚, a couple of sources stressed that a tight supply-demandbalance is lending fundamental support to rising prices. The marketis short right now, one went on, and if summer weather is normal”it will really be short.” And although crude prices have not heldon to the $17/bbl level they attained after several OPEC membersannounced an export cutback plan, the fact they stabilized between$15 and $16 eased the price competition with gas, he said.

Then there are the electric utilities in Texas and other partsof the Southwest that are short on coal because of rail deliveryproblems, the marketer said. And in the long term the use of gasfor power generation will be rising; “we are already seeing that.”Few new coal units are likely to be built over the next few years,and “the nuclear situation is pitiful.”

Finally, he concluded, the Nymex strip is making storageinjection purchases right now look like a good idea.

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