Sumas was making waves in the gas market earlier in the week bybeing the first point to exceed $3 pricing in this winter season.But it was tsunami time Friday as the $3 level was left way behind.How does paying $25/Mcf for Canadian supplies grab you?
While saying most Sumas deals were done at $8.00-17.00, a bigmarketer added he had seen a huge range going all the way from$3.50 to $25.00.
Some sources professed to have no idea what caused the Sumasuproar; “it’s just nuts there,” one said. Another thought it was acombination of factors aggravated by “weather hype.” The real coldweather has not even hit yet in California but is still in Montana,he said. Northwest Pipeline issued its weekend entitlement againstovertakes (see Daily GPI, Dec. 18) proactively as a guard againstpotential problems, he said.
Other traders offered thoughts about people covering shortpositions, especially a big marketer reportedly short at Sumasagainst index who had been buying large volumes from distributor BCGas earlier in the week. After BC Gas went from being a net sellerto yanking back recallable gas it had sold to others, that putimmediate pressure on prices and the big marketer was forced to bidup its numbers, one source said.
A Calgary-based marketer thought Sumas was zooming due to thecoincidental convergence of peak gas loads for heating and powergeneration. All of the region’s LDCs were calling in discretionarysupplies to cope with forecasts of bitter cold over the weekend, hesaid. And a U.S. trader said the prevailing Sumas export capacityof about 600 MMcf/d net was “as low as I’ve ever seen it during thewinter.” Some gas was even going back up into Canada through theSumas-related Sipi system to handle the burgeoning load of BC Gas,he added.
The great majority of Sumas quotes were in even-dollar amounts.It just demonstrates that no one wants to quibble about pennies,nickels, dimes or even quarters at such rarefied levels, one sourcecommented.
“It makes our market look kind of dull by comparison,” said aNortheast/Appalachian trader noting the “madness” at Sumas. TranscoZone 6 quotes fell slightly while most other points in the regionwere flat.
Much of the general market was flat to slightly higher, with theoccasional upticks of a nickel to a dime or more concentrated inthe West. Naturally, the fallout from Sumas tended to cause largerjumps at related points. PG&E citygates ran as high as $3.45,Stanfield quotes topped out at $3.25, and Westcoast’s Station 2 wasreported in the C$3.10s and C$3.20s.
©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.
© 2022 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |