Dive

Reported Gulf of Mexico shut-ins were up a little Friday, but the continuing production losses from Hurricane Ivan no longer had any price-boosting influence. Instead, quotes fell across the board (although Columbia Gas’ loss of a penny or two was essentially flat) as weather-related load remained elusive and the usual weekend loss of industrial demand added its depressant effect.

Flat to moderately lower pricing dominated the cash market Monday, with larger losses at Midwest/Northeast citygates and some single-digit gains in the Midcontinent, Southwest basins and Southern California border breaking up the overall trend.

As one source had expected (see Daily GPI, March 4), the combination of Wednesday’s screen dive and generally mild weather forecasts resulted in spot market weakness Thursday. All points were close to united in recording drops from a dime to about a quarter; most were in the mid to upper teens.

Winter made its official debut Sunday, but outside of the Rockies and Upper Plains there was little evidence of the season Monday. Forecasts of continuing relatively mild weather through the weekend helped accelerate the price declines that had begun Friday. Monday’s losses were generally in the range of 35-85 cents, with most exceeding half a dollar.

With a long holiday weekend and increasingly moderate weather looming on the immediate horizon, no one was surprised to see across-the-board declines in double digits Thursday for prices through the end of the month. And despite a surprisingly low storage injection report and the late-afternoon emergence of Tropical Storm Fabian, sources expect softening to continue Friday in trading for the initial September aftermarket.

The dam burst on an already weakening cash market Friday. Following a record-high storage injection report and the screen’s plunge of just over 60 cents in response Thursday, nobody was surprised to see weekend numbers fall by anywhere from 40 cents to nearly 80 cents. Declines ranging from a little less than half a dollar to 60 cents dominated the market.

A great majority of the cash market ranged from flat to nearly 20 cents higher Monday as traders watched a skyrocketing screen and heard a great deal of talk about nuclear plant outages. But CIG, Cheyenne Hub and Questar led Rockies/San Juan Basin declines sparked largely by a major one-day constraint on Rockies gas moving eastward and also by light weather load.

Nearly all points continued to climb Wednesday as winter weather began to pay a return visit to northern market areas and parts of the West. However, widespread late price retreats and expectations of the demand slump that typically accompanies a long weekend had sources anticipating softness Thursday.

Except for plunges in the Rockies, the market ended the week on a considerably stronger price note Friday than some had been expecting. A few Midcontinent pipes (Williams, NGPL-Midcontinent and Reliant-West) were close to either side of flat, but gains at other non-Rockies points ranged from a little less than a dime to more than a dollar (Algonquin citygate). A majority of the upticks were between a dime and a quarter, with much larger ones clustered in Northeast citygates.