The cash market has plenty of fundamentals to deal with goinginto the Christmas weekend. But despite widespread freezing weatherand a profusion of actual and/or potential pipeline OFOs (question:does a Strained Operating Condition mean CIG has a hernia?), priceswere unusually bearish Wednesday in light of what many wouldconsider bullish conditions. Most declines were in the neighborhoodof a dime, although some Western points that had been flying highearlier in the week were measuring their losses in terms ofdollars.
While they lasted, Northern Border deliveries into Chicago wereabout the cheapest around, according to a couple of sources. Butthe pipeline said Wednesday it expects to have no capacity toChicago through Sunday due to “operational problems” (seeTransportation Notes). A Calgary trader thought that would probablyback up at least 200 MMcf/d into Alberta, but said the effectdidn’t seem to be showing up to any great extent Wednesday asprovincial pricing started at C$2.53, fell to C$2.42 but thenrebounded to around C$2.48. That approximately reflected theoverall market’s softness.
Several points in the West were moving lower in later deals,sources said. However, a Gulf Coast trader had the oppositeexperience; highs on the day were made close to nominationsdeadline, he said. Another trader, noting that Gulf pricing has hadthe unusual experience of consistently being the lowest-pricedmarket recently, said he attriubutes that entirely to the region’sexcess of storage gas.
ONG seems to be the Midcontinent pipe hit hardest by frozenwellheads, a marketer said. “Numerous” freeze-offs in the TexasPanhandle and Hugoton area caused a lot of people to go shoppingfor gas at Northern Natural-demarc, which was running about a dimeover Ventura pricing, he said. Also, Williams numbers got a boostfrom an OFO (see Transportation Notes), he added.
Although quite a few traders indicated they would come into theoffice “for at least a while” today, virtually all quotes receivedWednesday were for Dec. 24-28 flows (and through the 29th for someCanadians, who will observe Boxing Day Monday). There may have beensome odd lots of one- or two-day deals done “just for changingweather reasons,” a marketer said, but they were a distinctminority. A producer thought many people would be at work briefly”just because Nymex is trading. I suppose they’ll just watch theirmonitors and eat Christmas party candy.”
Although illiquidity is expected to dominate whatever tradinggets done today (one source said he had baseloaded everything hehad through the end of the year for that very reason), aHouston-based source guessed there would be a few people out in themarket and they would be “buyers who have underestimated theirweekend loads.” Because little supply or trading partners will beavailable, they could find themselves paying up for new volumes,the marketer said, but overall “this market is very, very weak.”
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