A Calgary source had the appropriate assessment of Wednesday’sfirming swing market: “There’s not enough snow to ski yet, but theway these gas prices are moving you’d think we were in the middleof a blizzard.” Overall prices were moving higher for the firstsignificant gains of this week. Most increases Wednesday werebetween a nickel and a dime, but Northeast citygates led the pricepack by rising a dime or more. A jump of just over 8 cents by theNovember futures contract on its date of expiry along with theapproach of colder weather, especially in the eastern two-thirds ofthe nation, were cited as reasons for the upticks.

Forecasts of a cooling trend had one trader paying $3.21 in arest-of-month Chicago citygate deal while selling for today-onlyflow at $3.14.

Although it came too late to affect Wednesday’s cash trading,the AGA storage report of 13 Bcf injected last week was “bullish,no question about it” to a Midcontinent marketer. He added,” 25[Bcf] was a popular [pre-report estimated] number, and we almosthalved it.” However, a Houston-based buyer wasn’t so sure. The AGAfigure may seem tiny, he said, but remember that total volume instorage is still very close to year-ago levels.

Although he attributed part of intra-Alberta’s price strength tothe screen, a Calgary marketer also cited a physical shortfall ofgas. NOVA field receipts are running around 12.5 Bcf/d versus atarget of 12.6-12.8 Bcf/d, he said. However, he called theprovince’s storage situation “neutral” heading into the winter. “Weare only at 83% full compared with 90% a year ago. But the 83%figure is somewhat diluted because of additions to storage capacitysince last year.”

One source quoted Michigan basis at plus 20 for MichCon and plus19.5 for Consumers Power, but said fixed-price citygate bids forboth utilities were coming in at $3.30. Another trader who paid$3.31 for a Consumers package wryly commented, “We waited for theNymex settlement [but] shouldn’t have done that.”

Here is a sampling of other basis reports Wednesday: Stanfieldat minus 6; Houston Ship Channel at minus 2.5-2.25; theMidcontinent in general at minus 9 but with NGPL wider than thatand ONG and ANR a little stronger at minus 8.25; NorthernNatural-demarc at minus 2-3; and Southern California border at plus2-3. Midcontinent pipes were quoted at fixed prices in the low$3.00s, while Rockies/Stanfield/Sumas numbers were on either sideof $2.90.

Typically, there is quite a bit of disagreement about what theNovember aftermarket holds in store. Wednesday the sentiment seemed tobe shifting from below-index pricing as reported earlier (see DailyGPI, Oct. 27) to expectations of astronger aftermarket. A trader reporting Chicago baseload at $3.26said he thinks a lot of people are going long for November. “Thesentiment I’m feeling the most from other traders is that they arebearish about the first few days of the month but bullish on therest.”

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