Thursday was an excellent day to pursue a sell-early, buy-latestrategy in the Gulf Coast, according to a marketer. He saw TranscoStation 65, Henry Hub and TGT SL uniformly start around $2 even,then get up to $2.03 before falling back to the mid $1.90s in lateactivity. He thought the early cash strength was based on thescreen rising a few cents, but a lack of fundamental demand failedto support the upticks
Overall, most points were tacking on gains of 2-3 cents. Rockiespipes generally are solidly back into the $1.30s, with CIG leadingthe way by forging ahead into the $1.40s for non-DJ gas. However,continuing high linepack and an entitlement threat on Northwestkept Sumas from joining in the recent Rockies strength. PermianBasin gas saw perhaps the day’s biggest increase of several centsinto the mid $1.80s as it continued to benefit both from a returnof Texas’ heat wave and the restoration of its Midcontinent/Midwestoutlet through NGPL’s Permian pool.
Northeast citygates also registered strong increases of about anickel into the mid $2.10s, but a marketer doesn’t expect thefirmness to last. “It’s great weather here on the East Coast,” hesaid. A couple of area nuclear plants are down, he added, butthat’s not impacting gas load significantly. A Texas producerconcurred with his anticipation of softening today, saying theusual drop in weekend load means cash numbers will not be able tohold up.
A producer making sales on either side of $1.90 on the majorMidcontinent pipes said rising heat levels in the region are givingmore of a boost to prices. There might be a bit of slide going intothe weekend, he acknowledged, “but if Panhandle Eastern falls intothe mid $1.80s, I for one will be a buyer.”
Another source, noting that ONG has tended to lead theMidcontinent price pack this month, said in addition to intrastateair conditioning load, he thinks people went into the month shorton ONG. Then some folks elected to sell “a bunch of gas” in thefirst few days of June when the aftermarket was showing someinitial strength. That makes even more people short now, he said,and they’re having to make up for their shortness.
A marketer looks for Rockies prices to go at least a littlehigher next week as Williams Field Services begins maintenancecurtailments at the big Opal processing plant. The plant handles450-500 MMcf/d, he estimated, and as much as half of that volumecould be taken off the market at times during the work. Detailsabout the curtailments could not be obtained from WFS by presstimeThursday.
In addition to all the complaints about what a “dull,” “stale,””dead,” “really quiet” or “boring” market June day trading hasproduced so far, a producer said she understands that many gasbrokers “are really frustrated” at how hard it is becoming to matchup deals. She has heard of some broker margins falling as low as0.25-0.5 cents.
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