Outweigh

Prices rallied solidly across the West Monday, but the market was clearly a mixed bag in the East, although eastern gains tended to slightly outweigh losses. More heating load was starting to show up in some regions, particularly the Midwest, and Monday’s spot prices also derived support from the screen’s 33.2-cent spike on Friday.

The price of Kinder Morgan and Terasen shares soared on Tuesday following the announcement late Monday that Kinder Morgan Inc. (KMI) would buy the British Columbia gas utility and pipeline company for $3.1 billion in cash with $2.5 billion in assumed debt (see Daily GPI, Aug. 2).

The market was mixed for the second straight day Thursday, but this time more of the price movement was positive than negative. Most points were close to flat again, but rebounds in the previously softer West ranged up to about a dime.

Weighed down by the day-earlier futures loss of nearly 20 cents and with only marginal prospects for further gains in fundamental demand, most of the cash market recorded drops ranging from about a nickel to 20 cents Tuesday. Western points were a bit stronger than the overall market, seeing modest rebounds in the Pacific Northwest and Western Canada and flat to barely lower numbers elsewhere.

As NGI sources had expected, Thursday’s rise of about a dime in natural gas futures proved sufficient to outweigh moderating weather and the usual demand slump of a weekend period, producing moderate price gains at most eastern points Friday. In the West, however, Waha and PG&E-related points were the only ones to join the overall firmness. Most of the West ranged from flat to down about a nickel, although San Juan-Bondad recorded a whopping 36 cent plunge. Scattered eastern points were flat, but the majority rose by about a nickel to 15 cents.

As NGI sources had expected, Thursday’s rise of about a dime in natural gas futures proved sufficient to outweigh moderating weather and the usual demand slump of a weekend period, producing moderate price gains at most eastern points Friday. In the West, however, Waha and PG&E-related points were the only ones to join the overall firmness. Most of the West ranged from flat to down about a nickel, although San Juan-Bondad recorded a whopping 36 cent plunge. Scattered eastern points were flat, but the majority rose by about a nickel to 15 cents.

Weekend prices bowed under the weight of the umpteenth huge weekly storage injection report and generally mild weather in the key Midwest and Northeast market areas. Despite reports of air conditioning load starting to pick up to near-normal summer levels in the South and Midcontinent, quotes declined between a nickel and 20 cents at most points, with much bigger plunges seen in California.

If new natural gas production does not come on-stream in Mexicoin the next two to three years, the country will have to importmore than half of its gas needs, according to a new report from thecountry’s energy regulator Comision Reguladora de Energia. Thecountry now imports about 7% of its gas, mostly from South Texas.