It hardly came as a surprise to anyone when cash prices took along, hard fall Thursday. The previous day’s screen dive had givena none-too-subtle signal of where cash was going. Double-digitdecreases were prevalent at virtually all points, with some lossesreaching 20 cents.
Sources look for more softness today, but not as steep asThursday’s drops. The short-term situation has really taken over, amarketer said. However, he remains bullish for the long term. “Weare about 300 Bcf over last year in storage, and this [May futures]is still the cheapest month out there” looking at the forwardcurve, the marketer said. Thus “people will continue to slam gas inthe ground.”
There is no question that cash was responding totally to whathappened on the screen Wednesday, one source said. “How else do youtrade $2.50 at Henry Hub one day and the next day you trade it at$2.30?”
A Southwest trader thinks “prices are really set to crap out”today, and he expects San Juan-Blanco numbers to sink below $2. Onemarketer had told him, “Don’t even try to give gas away to us forfree.” The trader was surprised about not getting any callsThursday from sellers trying to find a weekend home for their gasearly.
A PG&E high inventory “advisory” (short of an OFO) sentcitygate prices crashing into the $2.60s.
Northwest Pipeline expected to end a compressor outage at theSnohomish (WA) Station by Thursday night, but warned that if it wasunable to do so, Primary Firm curtailments are likely to beginSaturday. A marketer apparently expects the restriction tomaterialize. Citing the Snohomish situation and a ban of on-systembalancing in the pipeline’s northern section, she expects Northwestprices to buck a general downward trend in the Rockies and maybeeven rise a bit. Another source expected Rockies prices to convergewith next-month levels, “which are currently around $2.00.”
A marketer said his company thinks gas prices will be risingthis summer, but May “still has room on the down side. We’re goinginto a strong sell mode to get rid of as much as we can whileprices are still up there.” He looks for profitable opportunitiesto buy gas later, probably in the May aftermarket.
It looks like bidweek will be slow in developing yet again.”Buyers are sitting on their hands,” a big aggregator said.
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