Taking a cue from a last-day uptick in the Henry Hub futurescontract for February, late-January cash prices ranged from flat toup about a nickel Wednesday. February bidweek numbers were alsomoving a bit higher in several instances, sources said.
In an event that could cause a temporary supply squeeze at Sumasand Westcoast Station 2, a fire Wednesday morning at the Solex NGLstripping plant outside Taylor, BC, caused Westcoast to suspendoperations at the nearby McMahon Plant, its largest processingfacility. Recent flows through McMahon have been 650-700 MMcf/d, aWestcoast spokesman said. As of Wednesday afternoon it was tooearly to assess damage to the third-party Solex plant or tell whenMcMahon might return to service, he said. The fire poses littledanger to McMahon as it is some distance from Solex, he added, butthe pipeline decided to shut it in as a precaution.
“It looks like we’re all screen watchers” because there was noother reason apparent for Wednesday’s modest price firmness, amarketer said. However, he and other sources agreed that AGA’safternoon report of a meager 92 Bcf in storage withdrawals lastweek is likely to depress cash numbers today.
A Southwest-oriented trader complained that liquidity inlate-January swing business was drying up quickly as more peopleclosed out their incremental positions and turned their attentionto February. But several sources noted that fixed-price bidweekactivity remained slow in developing, even after the futures expiryWednesday afternoon.
Chicago is trading “all over the board” for February, a marketersaid. Due to the screen run-up, he said, he was doing citygatedeals in the $1.85-91 range Wednesday following a $1.82-84 rangeTuesday. It doesn’t look like the Chicago-area buyer who said latelast week he would hold out for $1.75 citygate offers (see DailyGPI, Jan. 25) will get his wish, the marketer said.
Western bidweek numbers followed the screen a little higher butnot by much, according to one marketer. He quoted prices in the lowto mid $1.60s in the Southwest basins, in the mid $1.60s in theRockies and at $1.82-84 at the Southern California border. Othersources reported prices from the mid $1.70s to low $1.80s in theGulf Coast, from the high $1.60s to the mid $1.70s in theMidcontinent and in the high $1.80s for Michigan citygates.
One trader in the Northern California market planned to golighter than usual on baseload in February. Even though it’swinter, recent high-inventory OFOs on the PG&E system make it”a littler cleaner [operationally] to go with swing, and therereally isn’t much price risk either way.”
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