Mode

Except for still-exploding Northern California numbers, the cash market was mostly in standpat mode Thursday. Eastern prices tended to move little if at all, and there was generally moderate softness in the Southwest basins and Rockies.

The cash market went into a general stand-pat mode Wednesday,awaiting developments on the tropical storm, cold weather andstorage fronts. Nearly all points were united in seeing littleprice movement either up or down.

Those in a counting their chickens mode relative to all theplanned new natural gas-fired generating capacity waiting in thewings, might want to consider a new analysis of just how efficientthose new plants will be. Energy Ventures Analysis (EVA) ofArlington, VA reckons gas displacement by new more efficientgas-fired combined cycle units will total over 250 Bcf/year inTexas and over 100 Bcf/year in California from 2003-5. That’s notto say gas use will decline, because load growth will swallow upsome of those savings, but “the initial gas demand growth rate inthese key regions will be dampened.” The efficiency factor of theswitch to the latest turbines from older steam generation unitswill be most pronounced in those two states, but will have animpact in other areas as well. EVA’s report, “Outlook for Gas-FiredCapacity Additions,” points to 411 gas turbine projects, generating190,980 MW, which are expected to be completed, primarily betweennow and the end of 2003. Where the new units replace oil or coalgeneration, the switch will be a plus for natural gas, but incertain areas they will be replacing older gas hogs as well. EVA’sforecast is part of its “FUELCAST” study which addresses the longterm outlook for fuel and electricity markets.

Cash numbers remained in their early-March climbing modeThursday, with advances of about a nickel to more than a dimeclosely mirroring those of the day before. However, a majordifference on Thursday was that western upticks tended to besmallest. The larger increases were mostly in eastern markets.

Except for continued rises at some Northeast citygates, most ofthe cash market was in rout mode Wednesday. Price decreases of adime or more-much more in a few cases-prevailed at nearly allpoints despite cold weather blanketing much of the U.S. from theRockies eastward. A falling screen and forecasts that some areaswill be warming up this weekend constituted the main cashdepressants, sources said. Despite what one trader called a “ratherhealthy” AGA figure of 116 Bcf withdrawn from storage last week,few saw much chance of a holiday weekend rebound.

The cash market continued to muddle around Monday in a generallyflat mode with a slight bias to the upside as traders tried toassess whether there was enough cold weather around to reallymatter. To Houston sources donning sweaters for possibly the firsttime this season, the answer might have seemed to be yes, but toothers it was no as they noted the abundance of available storageand the fact that only a few markets were experiencing sub-freezingtemperatures. Most points were flat to a couple of cents higher,with the declines of any size occurring at Northeast citygates(although Transco Zone 6-non NYC bucked the trend there with asmall gain). Northeast weather was rainy but not freezing.

Just in case there were any doubters still out there, AlliancePipeline says it now has nine of 10 mainline construction crews inthe field installing the $3 billion pipeline system. The crewsstarted construction on two spreads in North Dakota, one inMinnesota, two in Iowa, one in Illinois and two in Saskatchewan. AThird crew is starting in Saskatchewan this week.

Flatness dominated at nearly all market points Thursday, andseveral sources anticipate a softening mode today due both to thescreen’s decline Thursday and the usual slump of weekend usage.Also, a marketer said cooling weekend temperatures in Texas shoulddampen some of the recent air conditioning load in the state.

Cash prices returned to a climbing mode Friday, and in theprocess won more converts to believing in a fundamentally stronggas market this spring and summer. Although Western gains tended tolag a bit behind, most increases were between a nickel and a dime.Most of the double-digit gains occurred in the Gulf Coast,Appalachian and Northeast market areas.