The natural gas cash market went through a second day of overallflatness Wednesday as most of the nation absorbed spring-liketemperatures on St. Patrick’s Day and calmness pervaded the futuresmarket.
Some sources, who expected to see softer prices in theMidcontinent and the Basins, were surprised to see some minorupticks in their areas. “I had utilities give me gas back early inthe day and then I had people buying it at a higher price” later inthe day, said a Midcontinent-area marketer.
“Most of the people buying on the day market today gas weremarketers,” another source said. He added that the only logicalreason for any minor gains Wednesday was the small rise in gasfutures late in the day – “that, and maybe some expectations of areasonable storage withdrawal,” he added.
The American Gas Association (AGA) reported 134 Bcf in storagewithdrawals for the week ending March 12, which was at the higherend of most market expectations. However, “I don’t think thismarket cares much about the storage report right now withtemperatures being as warm as they are,” said one Gulf Coastmarketer. The storage surplus compared to last year is still 355Bcf.
California and San Juan prices also survived expectations ofsoftness for the day. “Even though utilities weren’t buying[Wednesday], we had east of California utilities buying the daybefore. This, coupled with relatively cold temperatures in the areacould have left a residual effect on prices,” said a Westerntrader. In addition, the trader said that many marketers arenet-short in the San Juan market right now. And “once marketers areshort and you get a little utility drive like we saw over the lastcouple of days, things tend to point upwards.” The trader addedthat under this scenario, expected cooler temperatures in the areathrough the weekend were apparently enough to support prices.
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