Downhill

“It’s a real roller-coaster in the market right now,” said a western marketer in the wake of another shockingly low storage injection report from AGA Wednesday afternoon. After a dive that morning that took nearly all cash quotes between about 10 and 20 cents lower, the trader consensus was that the cash ride is due to turn uphill again today.

“There’s a lot of gloom and doom all around,” commented a Midcontinent marketer. While the downhill slope for cash prices got a bit less steep Wednesday, no one was ready to argue with the marketer’s contention. Except for larger declines in the Rockies and at the PG&E citygate, most of the downticks were a dime or less, compared with overall drops in the teens the day before.

The downhill run for cash prices got a little steeper Wednesday, and any potential leveling off space remained beyond the horizon. Declines tended to range from about a nickel to 15 cents, but most were a dime or more. Once again, Rockies pipes either experienced less softening than the general market or even ranged from flat to a smidgen higher in a few cases as the region remained a bit warmer than most of the nation, although a mild cooling trend was under way.

As expected, swing prices resumed their downhill march Thursday,but there was enough winter weather across the northern half of theU.S. to keep most of the declines fairly moderate. Except fortriple-digit drops in California, few points fell more than about20 cents or so.

Except for OFO-inspired upticks in Northern California, the restof the cash market was on a downhill track Tuesday following theholiday weekend. Most declines were in the range of 20-30 cents,but tended to be larger in the Northeast and got as high as about70 cents at the Southern California border.

The downhill slope for end-of-January swing prices Tuesday wasabout as slippery as any of the icy roads in parts of the Midwestand Northeast. Despite such conditions that normally would helpprop up gas prices, it was a rare point failing to drop less than50 cents, and most of the declines ranged from 70 to 90 cents.

Last week’s yo-yo market pattern continued into the weekend asprices reversed direction once again Friday, falling between 15 and50 cents at nearly all points. California remained the contrarymarket with larger declines at the border and Malin and the day’srare uptick at the PG&E citygate.

“It looked like the screen and cash were in a race to see whichone could go downhill farthest and fastest.” A marketer’s commentaccurately summed up a day that more than ever indicated the bloomis quickly coming off this year’s price rose. Double-digit declinesdominated Thursday, with most exceeding 30 cents, and many GulfCoast and Midcontinent pipes experienced sub-$5 territory for thefirst time in months.

Aggregation of small retail natural gas customers is still alivein California, but barely. And it’s future is dim in the wake ofnew state legislation (AB 1421) passed earlier this month and nowon the governor’s desk. The legislation restricts unbundling in theretail core gas markets (see Daily GPI, Sept. 13).