The hemorrhaging of prices that marked the first two days oftrading in the December aftermarket came to a virtual standstillWednesday even as unseasonably warm weather continued in much ofthe nation east of the Rockies. Except for an increase of more thana dime into Northwest at Sumas, all points were either flat or upor down only a few pennies. The reason for the surge at Sumas andwhy it was handily outstripping Rockies prices was that distributorBC Gas in southern British Columbia was drawing more heavily thanusual on discretionary supplies, one source said.
Sources were divided on which way the market will go today andFriday. AGA startled more than one trader with a report of a net 8Bcf in storage injections last week when many were expecting to geta withdrawal figure. The storage situation, a drop of more than anickel in the Henry Hub futures contract and continuing mildweather that was expected to set high-temperature records for thedate Wednesday are a strong argument for renewed softness, somecontended.
But according to a Midcontinent marketer, cash prices havealready eroded to the point that there is no downside left. Peoplereally should have expected the small injection figure from AGA, hesaid, because there was virtually no heating demand last week, andthat was compounded by a four-day holiday weekend. Prices shouldstay range-bound until some cold weather arrives to give the marketa jolt, the marketer said. “[The storage report] is not enough toknock the bottom out of the market because the bottom is alreadyout of it.”
Prices tend to be a little stronger toward the West because theWest Coast through Central California is the only area with anysignificant cool weather currently. PG&E’s Diablo Canyonnuclear plant had one of its two 1,100-MW units down completely andthe other at only 50% power Wednesday. The first tentatively couldreach full power by tonight, PG&E said, while the second isscheduled to start ramping up this evening and could be at 100%generation over the weekend. But a trader said the nuke outagedidn’t really have much impact on gas load in California.
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