Divergence

Price divergence in Tennessee Gas Pipeline’s Zone 4 in northeastern Pennsylvania is one of those things that gets worse before it gets better.

There was a divergence of opinion last week within the gasindustry on President Bush’s broken campaign promise to press forrestrictions on carbon dioxide (CO2) emissions from powergeneration. Several energy officials, some within the same industryassociations, had different positions on the matter.

Unlike the East-West divergence in price movement thatcharacterized the first two trading days of the week, all marketswere on the same page Wednesday. Price increases ranged from abouta nickel to 20 cents, with most of them in the vicinity of a dime.

There was decided regional divergence in Tuesday’s swing pricemovement. The Gulf Coast and Appalachia/Northeast, being the areasstill affected most by unseasonably warm weather, ranged from flatto down as much as a dime. But from the Midcontinent westward,where it actually seemed a bit winterish behind a cold frontheading east, prices were flat to a few cents higher, with theRockies, Southwest basins, California and intra-Alberta seeingincreases of about a nickel or more.

The East-West divergence in price tendencies was repeated againTuesday in a slightly different way. While Monday’s overall uptickshad been most pronounced in the West, eastern markets retreated byabout a nickel Tuesday as Western markets managed mostly flat tobarely-off-a-penny performances.

The cash market, which had been fairly consistent in overallprice movement for most of last week, went into the weekendstarting to diverge on an East-West axis. While Friday’s mix ofgains and losses amounted to a generally flat wash, Eastern pointstended to be flat to about a nickel higher, and their Westerncounterparts tended to range from flat to about a nickel lower.

For the first time in several trading days, there was nodivergence between Eastern and Western market directions Wednesday.It was up, up and away all around as nearly all points registeredgains of around a dime or higher.