After several successive days of stagnation, the cash marketfinally was able to use a little bit of screen support andexpectations of colder weather moving into major market areas toget out of its rut Tuesday. Prices ranged from flat in theSouthwest basins to more than a nickel higher at New Englandcitygates and for intra-Alberta and several related western points.Most quotes rose between 3 and 5 cents.
“Cash is very firm even with moderate weather, but that raises morequestions than it answers,” a Gulf Coast marketer commented. However,between the Maritimes & Northeast stoppage in the Northeast (seeTransportation Notes) and the Stingrayconstraint in the Gulf (see Daily GPI, Dec. 7, 1999), traders are finding suppliesa little tighter than they would like, he said. M&N’s problem withice blockages is a common one for pipeline startups in coldconditions, the marketer added; much the same thing occurred withNorthern Border’s Chicago expansion in late 1998.
There was no big intra-day nominations rush on Algonquin even aftera midday rupture interrupted TCO deliveries into Algonquin at Hanover,NJ (see Transportation Notes), a largeaggregator said. “It would have had a lot more impact if there wasany serious weather around.” Even though the rupture occurred aftermorning trading had ceased, Algonquin citygates had already risen intothe low $2.60s largely on the basis of frigid weekend forecasts, hesaid.
However, even with an Arctic front approaching the Midwest, anIllinois independent power generator said current conditions wereso mild, “we are just taking our minimum daily requirements [ofgas] and burning No. 2 and No. 6 [fuel oil] to service the rest ofour load.”
A bullish signal for gas came from February crude oil futures,which shot up more than a dollar to $25.77/bbl. In addition toreports that the OPEC nations will not change current constraintson oil production at a meeting of ministers in March, one sourcesaid, “It sounds like someone is making a huge bet in advance” thatthe American Petroleum Institute will show a substantial drawdownin crude inventories in its upcoming report.
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