A minuscule gain at the Southern California border was about the only exception to falling cash prices Thursday. While a few scattered points dropped less than a dime, most measured their losses in double digits. The larger declines of about a quarter or more tended to cluster in the Rockies and at Northeast citygates.

A Northeast source was right on the money Wednesday in predicting that Thursday’s biggest plunge (60 cents) would occur at Transco Zone 6-New York City, although the pool still averaged more than a dime above other area citygates. A cold front is moving southeastward through the Northeast, and although it is expected to stall at the northern edge of the Southeast, the loss of market area demand pulled prices lower in the production area also.

Although the Plains states continue to endure high levels of heat, a cold front in the Great Lakes section of the Midwest was also making its negative price impact felt.

EIA said 69 Bcf was injected into storage last week, a figure that jibed well with previous expectations. But after an initial head-fake lower, the screen moved into positive territory as Nymex traders apparently favored the further reduction in the year-on-year surplus. “We were surprised that the EIA didn’t make any new revisions,” a Midcontinent source commented.

Despite overall losses, cash prices were moving higher after the screen began its post-storage report advance, a Midwest buyer said. The upswings were heightened in her market area due to people getting caught short when sellers began to disappear at some points in late trading, she said, citing NGPL’s Amarillo Mainline and Iowa-Illinois zones and Chicago citygates via Northern Border and Alliance as markets without any late selling offers. The buyer was among several looking for at least a moderate price rally Friday “because of cash following the screen higher today.” The Chicago area will be moderately cooler this weekend “but still pretty warm,” she added.

Western prices didn’t get the benefit of a screen boost and fell in late deals, according to a trader quoting El Paso-Permian going from early highs in the upper $2.70s to around $2.60. However, because of forecasts for continued hot weather in the West over the weekend, she also was among those anticipating rising prices Friday.

A western marketer noted that with the California border stable and Permian Basin quotes down about 15 cents, the basin-border spread widened to the unusually wide margin of 30 cents (it was only 12 cents in Wednesday’s deals). That was attributable more to Permian weakness than border strength, he said. Nearly everything was coming off in daily swing numbers Thursday, the marketer said, but screen increase helped push up baseload prices in deals done through the end of the month. “Western traders have lots to digest in recent FERC rulings about the energy markets in their region,” he commented

Despite general price softness so far this month, one source looks for higher numbers “in the long run. Later in the year the screen is going to go up in a big way. Around August or September there will be some serious spikes out of this trench we have dug.” He admitted, “I don’t have anything to back that up; it’s just a feeling.”

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.