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Price Upticks Recover Tuesday’s Lost Ground
Despite Tuesday’s overall price losses, the rising trend astrading progressed carried over into Wednesday and resulted inmoderate to strong rebounds. Increases mostly were in the range of5-10 cents and tended to cancel out the Tuesday declines.
The first return to $3 pricing since the winter heating seasonoccurred in an unlikely market: not Northeast citygates as onemight expect but rather in the Rockies, which has been experiencingsnow this week. In a super-volatile range that approached a dollar,Denver-Julesburg Basin quotes went as high as $3.25. In addition tothe cold, Public Service Co. of Colorado’s implementation of anOperational Flow Order caused the big run-up, sources said. PSCOonly enacted the OFO for one day, but unless shippers step up theirvolumes it could last longer, a producer said. He thought a lot ofpeople were drafting the pipe because prices are so relativelyhigh, and the fixed-price spreads between the Rockies and theMidcontinent aren’t supporting the cost of transportation.
Although the $3-plus DJ reports came from several sources, amarketer who did DJ deals in the high $2.20s was dubious. Yes,there was considerable run-up from the OFO but it only lasted ashort time before falling back, he said. His company would havebeen tickled pink to sell anybody DJ gas for only $2.40, themarketer added.
Midcontinent pipes were up almost a dime to the $2.40 area buttrailing off in late deals, one source said. He was gettingsame-day calls for gas because of cool weather, “and that [same-daycalls] doesn’t often happen in April.” He expects a fair amount ofheating load this weekend as Oklahoma temperatures in the 30s and40s are forecast.
A marketer reported doing a baseload Malin-to-PG&E Citygatespread deal at 40 cents, “which means we bought Malin and sold thecitygate.” That shows willingness on the part of the market to owncitygate-delivered gas for the rest of April, he said, which couldbe due to PG&E’s recent OFOs. Another trader said he heardthere might be a group planning to file a protest with theCalifornia PUC “about the PG&E overtake and then undertake[OFO] thing. It was pretty ridiculous.”
A trader expects Sumas prices to come off quite as bit as thePacific Northwest warms up and also because BC Gas had beeninjecting a “bunch” of gas into storage but now its field is downfor routine testing, so extra supply should be coming available.
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