Near-flat numbers continued to reign in most of the market Wednesday, but softening tendencies were becoming more noticeable. The absence of Atlantic tropical activity combined with a substantial cooldown in much of the Midwest to produce another mixed market in which spikes continued at many Northeast citygates but were counteracted to some extent by growing losses in the Midcontinent/Midwest and at some Gulf Coast locations.
The eastern heat put a floor under much of the market, which saw quotes ranging from flat to about $1.25 higher, although only the Northeast recorded any double-digit gains. Losses ran as high as about a dime.
One source suggested that expectations of another relatively low storage injection report Thursday may have prevented further price deterioration.
After Tuesday’s neutral 0.4-cent gain, Nymex had slightly more positive guidance for Thursday’s cash market as July futures rose 1.6 cents (see related story).
Transco’s Zone 6-New York pool continued to skyrocket, nearly doubling Tuesday’s advance by rising about $1.25 to the mid $7.30s to handily exceed all other gains and garnering a top quote of $9 in doing so.
The low-pressure area formerly known as 94L failed to advance beyond south of Cuba, and the National Hurricane Center said it had no tropical disturbances to monitor Wednesday afternoon other than Tropical Storm Adrian off the southwestern coast of Mexico.
The market appeared to be settling into a fairly quiet period as cooling demand was expected to remain robust for a while in much of the East but was diminishing in the western and northern sections of the Midwest. However, highs in the 90s would continue to rule in the Northeast and the South as far west as Arizona. As it has been for quite a while now, the West was predicted to stay mostly mild to cool.
It continued to look as if the intentional flooding of South Louisiana’s Atchafalaya Basin in order to protect Baton Rouge, New Orleans and the Mississippi River Corridor’s refinery/petrochemical plant complex between them was having relatively little impact on oil and gas production. The reported tally of gas shut-ins was essentially unchanged at 31.54 MMcf/d as of Tuesday, according to the state’s Department of Natural Resources (see related story). The agency said five more previously shut-in wells had restored operations in addition to one other since last Friday.
Despite a marketer’s contention Tuesday that virtually all of the Northeast’s gas-fired generation units were already operating, there must have been some room for extra gas demand in the region as citygates continued to command the biggest price gains. With Henry Hub numbers remaining flat for a second straight day, the basis spread between it and Transco Zone 6-New York exploded to a little more than $2.50.
A high-linepack OFO by SoCalGas was in effect for only Wednesday. Southern California border numbers were flat while the SoCal citygate rose nearly a nickel, according to IntercontinentalExchange (ICE). Border volumes traded on its platform rose slightly from 723,900 MMBtu Tuesday to 729,100 MMBtu Wednesday, ICE said, but citygate activity eased from 302,000 MMBtu to 253,100 MMBtu.
Westcoast continued to report high linepack Wednesday, but Station 2 prices rebounded by a little more than a nickel from Tuesday.
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