How low can you go? Some traders likely were asking themselvesthat very question Wednesday afternoon after seeing cash pricescrater by about 20 cents or more at nearly all points that morningand then watching the screen go into a swoon immediately after theAGA storage report, which means the cash market is expected toregister big losses again today.
Although AGA’s figure of 78 Bcf injected into storage last weekkept the year-on-year refill deficit growing, it handily surpassedprior estimates that had centered around 60 Bcf. Thus profit-takingbecame the name of the game in the Nymex trading pit, one sourcecommented.
As usual, intra-Alberta was the first cash market to react tothe screen’s swan dive. Prices that had opened in the vicinity ofC$5.10, down more than C35 cents from Tuesday, had dropped evenfurther to the C$4.80s Wednesday afternoon, according to a Calgarytrader. However, once again demonstrating just how closely Albertanumbers track screen activity, they had gone back up to either sideof C$5.00 later that afternoon in a direct reflection of a modestfutures rebound in Access trading.
With fairly benign temperatures dominating the weather pictureexcept in a warm-to-hot Rockies/Southwest region, it’s a fairlyneutral market right now with little influence besides futures,several sources agreed. A Gulf Coast marketer said he was seeing adropoff in utility demand due to moderately cooler temperatures inthe Southeast.
There was consensus among cash traders that Wednesday’s steepprice dive will continue this morning. However, one contacted afterAccess had futures recovering some lost ground said that mightprove to be a mitigating factor in any cash drops. Also, shesuggested, storage injection levels are still lagging, so demand inthat area may pick up at the currently lower prices.
A Gulf Coast producer said that while none of his ilk areespecially happy about falling prices, “there’s no reason for us toweep and wail. It [futures screen] is still at $3.94, and that’s alot better than 94 cents.”
©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |