Pacific Gas & Electric issued a customer-specific OFO totake effect today. As of Tuesday morning the utility was projectingabove-target linepack levels through Friday.
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Transportation Notes
After having a customer-specific OFO in effect for Wednesdayonly, Pacific Gas & Electric issued a new customer-specific OFOfor Saturday and was projecting above-target linepack Saturdaythrough today. An unplanned outage prompted Transwestern toallocate San Juan Lateral volumes for the Intraday 1 cycle Friday,affecting 18 points.
San Juan, California Rise Above Sea of Softness
San Juan Basin and California were conspicuous Monday as theonly markets swimming against a bearish tide. All other cash pointswere falling by anywhere from a penny or two (Southwest/Rockies) to15 cents or more, with the majority of declines tending to bebetween a nickel and a dime.
Demand for Storage Gas Pushes Prices Higher
The rebound from Monday’s price downturn bounced high above therim Tuesday as many price points experienced gains well over anickel. The upticks were attributed to a rise in the futures marketlate Monday afternoon and early evening, and a growing inclinationto buy gas for storage now before prices rise further.
Small Futures Gains Prompt Bulls to Come Forward
Despite much-above- normal temperatures across much of the U.S.,natural gas squeezed out small gains at the New York MercantileExchange yesterday in a mostly dull trading session. Throughoutmost of the day the March contract looked as if it would closeunchanged, but a late rally put a positive spin on the day’sevents, nudging the prompt month 2 cents higher to finish at$1.838. Estimated volume, registering a measly 37,697 contracts,confirmed the sluggish nature of the market.
March Futures Nearly Break Above Down Trendline
While the March Nymex futures contract began Friday’s tradingsession on yet another up-note, a late sell-off brought it backdown to settle 2.9 cents lower on the day. The spot month went upas high $1.875, where it flirted with crossing over the 40-daymoving average, only to finish the day at $1.80.
Warm Weather Puts Bears Back at Helm
Above-normal temperatures, both outside traders’ windows and intheir weather forecasts, continued to weigh on the futures marketthroughout trading Monday. The February contract gapped lower atthe open as moderate selling prompted the market down 6.4 cents toits $1.714 close. Estimated volume was heavy, with more than 93,000contracts changing hands.
June Futures Barely Manage To Expire Above $2
Anyone who thought that the meager 0.1 cent gain the June Nymexcontract turned in on Tuesday would lead to a boring expiration daywas dead wrong. June managed to spew out one more major pricedecline on Wednesday, as the contract went off the board down 7.8cents for the day to settle at $2.017.
Aftermarket Strength Credited to Screen Run-Up
The April aftermarket got off to a running start with swingdeals being done Tuesday often 2-3 cents above bidweek averages,with a few points even stronger than that. Sources were virtuallyunanimous in attributing the cash strength to a further run-up onthe futures screen. In fact, traders were buzzing all day about thedizzying heights being hit by the May contract, often withquestions like, “What the heck is driving this thing?”
Early Dose of Summer Sends May Futures Above $2.40
The May Nymex contract rallied 5.7 cents to settle Monday at$2.409, thanks to what sources said was good peak demand buying inthe physical market. “There was definitely some peak airconditioning demand in Texas today, and that’s exactly where youwant to see it to influence natural gas prices,” one of the sourcessaid. Buoyed by that strength, May had no problem rising from itsopening trade of $2.345, which also turned out to be its low pricefor the day.