New price movement was close to non-existent in almost the entire cash market Wednesday. Only a PG&E citygate uptick, a border-SoCalGas decline and mild Rockies softening provided variation in what was otherwise near-uniform flatness.

No one expects price stagnation to continue today, though. A June futures contract that was already considerably lower during morning cash business plunged even more in the afternoon after AGA reported storage injections of 119 Bcf last week. There just isn’t enough fundamental support to counteract the depressant effect that will have on today’s cash numbers, sources said.

To some, the question was not why the market looks poised for a new downturn again but rather how it had achieved even a moderate show of strength since late last week. There has been evidence of more air conditioning load recently in the South and Midcontinent/Midwest, but high temperatures were only rarely surpassing the mid 80s. Storage buying has obviously been fairly robust, as three straight weeks of 100-plus Bcf injection reports will attest, so that must have been taking up some of the slack from a general shortfall in weather-related demand, a marketer noted.

“It [market] is all a screen and storage play right now,” according to a Gulf Coast trader. “Of course, going by [Wednesday’s] results there’s not much play in either one.” It won’t take but a few more storage reports like yesterday’s to “totally blow away” the year-on-year deficit, he added. At least one analyst is already predicting a 110 Bcf injection figure from AGA next week.

The latest mid-term weather forecasts indicate that substantial competition for gas supplies between storage injectors and power generators is still a ways off in the future, a Midcontinent marketer observed. The National Weather Service projects that only the Southeast U.S. will experience above normal temperatures next week. Panhandle Eastern basis for June was weakening to minus 10.5 cents Wednesday, the marketer said.

The PG&E citygate made Wednesday’s biggest gain of a little more than a dime despite the utility issuing a customer-specific high-linepack OFO for today. A fair amount of gate trading had already been completed before the OFO was posted, said a western trader. “In fact, Pipe Ranger [the utility’s Internet bulletin board] was saying `no OFO’ for a while” Wednesday morning, he added. A lot of people were trying to unload citygate gas after the OFO was announced, the trader said, but he had already done all his deals by then.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.