This week’s bull market did come to an end Thursday as generallyexpected, but there was only a slight amount of price retrenchmentprimarily because of a show of strength by January futures. Eventhough cash traders were starting to discount the most recent coldweather forecasts, people in the Nymex pit apparently were stillgiving them credence. Most points were flat to 2-3 cents down, withseveral scattered ones achieving small gains. Only a few pointsfell by as much as a nickel or so.
A Northeast trader thought people have been putting “too muchstock in the weather forecasts lately, because they don’t justifyprices as high as these.” Some Algonquin citygate and Transco Zone6-NYC quotes were still topping $3 Thursday.
A marketer saw no noticeable impact from an OFO on NorthernNatural Gas (see Transportation Notes), saying half-jokingly,”Everyone was too busy watching the futures screen rise.” Despitesome relative price strength in the Midcontinent, it was a fairlyquiet cash market, he said. “It seems that buyers hid in the weedsrather than show their short hands.”
Barring a market collapse between now and bidweek, it seemscertain that January indexes will be rising substantially. A coupleof sources reported doing fixed-price January baseload deals for$2.66-68 at the Southern California border and for $2.68-70 atSumas. The basis relationship likely was a bit skewed (NGI’sDecember border index of $2.37 was a dime above the Sumas index)because of the trading occurring a week before bidweek officiallybegins.
A marketer said ANR Southwest was already trading for January atindex plus 0.5-0.75, “which is a far cry from the index-negativedeals that were done for December. A possible explanation is thatbuyers are content to buy their gas for the two coldest months ofthe year at an average of index flat. That, coupled with someeagerness to be done with January business ahead of the holidays,has buyers stepping up.”
However, despite some earlier indications of substantial Januarytrading prior to Christmas, more sources were starting to say theyexpect the bulk of bidweek business to be done on Monday andTuesday after the holiday weekend.
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