Weather remained cold Tuesday over most of the East, butpredictions of at least a moderate warming trend developing and ahuge plunge in futures were enough to spur the cash market to makea steep descent of its own. Dollar-plus declines were common.Transco Zone 6 (NYC) fell nearly 20 dollars, yet still reigned asthe costliest price point with an average of more than $18.
It was a very quiet market to begin the new year, one tradersaid. Cash started out very weak because of the big Nymex decline,she added, and the forecasts of warmer weather kept the price routgoing. However, the trader reported some major demand at Waha andEl Paso’s Keystone pool in Permian Basin, causing prices to run upabout $1.35 from where they started the morning. However, she seeslittle chance of the run-up continuing due to the weather outlook.
With essentially flat numbers, Iroquois Zone 2 was conspicuousamong the much softer citygates at other Northeast points.TransCanada said it had determined there was insufficient capacity tomeet all FT requested for delivery at the East Hereford, PQ terminusof its TQM Pipeline where the compressor station exploded Thursdayafternoon (see Daily GPI, Jan. 2). Anassociated force majeure was declared Friday and FT nominations werebeing prorated at East Hereford, TransCanada said. There was no changein the station’s status as of Tuesday afternoon, a TQM official said,but the condition of the injured employee was much improved.
Speaking on conditions of anonymity, one trader said his companywas among a group of suppliers who won’t sell gas to Pacific Gas &Electric until the big utility gets its financial house in order again(see Daily GPI, Jan. 2). “It’s purely amatter of creditworthiness to our accountants,” he said. “PG&E’sgot everybody very nervous about the prices they’ve been paying forpower recently.” A Calgary source said he knew little about thesituation because he does almost no direct business with PG&E.Although he trades regularly at Malin and the PG&E citygate,PG&E does little purchasing at those points, he said. Since itcontrols so much capacity on pipeline affiliate PG&E GasTransmission-Northwest, the utility prefers to buy in Alberta andtransport the gas, he said.
A trader for a large aggregator said his staff is expecting AGAto report a storage withdrawal of 170-180 Bcf this afternoon.Despite the extreme cold of the between-the-holidays week, “LDCshave to be really concerned about about using up too much storagewhile they’re still in December,” he said. For that reason, “Idon’t think we’ll see any 200 Bcf-plus pulls for a while yet.”
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