As expected after the big injection volume in AGA’s weekly storage report and the Nymex downturn in reaction, cash prices resumed softening Thursday at all points. But outside of California declines ranging from nearly a quarter (border-SoCalGas) to a little more than a dollar (Malin), other markets fell generally between a nickel and 15 cents with only a few scattered points exceeding 15 cents.

“I think we’re seeing the effects of a very warm Northeast” keeping prices from tanking for the time being, said a trader. However, with a cool front moving in to lower temperatures in the region significantly over the weekend, he looks for drops today bigger than Thursday’s, which were in the teens.

Not everyone was so sure about more softness for the weekend, though. One source noted that the screen, after seemingly vacillating about which way to move for most of the day, finally achieved an afternoon gain of nearly a nickel. And a Texas-based producer reported that although it wasn’t hot enough yet in the South to create big electric utility demand, he was seeing “a fair amount of buying” for storage injections. The producer thought that the combination of storage load and the mild futures uptick might be enough to negate the usual weekend slump in gas demand and “have cash trading sideways” today.

The recent fall in prices is allowing gas to regain some competitive advantage against alternative fuels, a marketer said. Gas is still about 40 cents/MMBtu more expensive at the burnertip compared with No. 2 fuel oil delivered at New York harbor, he said, but that’s only about half the spread of 75 cents quoted by another source last week (see Daily GPI, April 30).

While the Northeast endures a mini-heat wave, it was still rather winter-like in the Rockies as snow was reported in parts of Colorado, Utah and Wyoming. Although a few Rockies quotes are dipping below $4, a few points there saw some of Thursday’s smallest declines.

Meanwhile, plunging California numbers have that market trading $2-3 below index. Temperatures are getting pretty warm in Northern California, a western trader said, “and that has PG&E linepack heading toward the red zone [above maximum target levels] again.” For a while Thursday he saw off-peak Path 15 (PG&E territory) power prices “get below gas” for a while, but they later rebounded. By getting below gas, he meant it would have cost someone more to buy gas and generate electricity himself than to purchase the power elsewhere.

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