Swing

Traders found a mixed bag in launching the March aftermarket Thursday. Although swing prices began the month handily above indexes, they were generally flat to end-of-February numbers, but with sizeable variations to both the downside and upside.

The February aftermarket got off to a fairly strong start Thursday with swing quotes up a few cents from end-of-January levels in most cases and generally about 15-20 cents ahead of apparent monthly indexes.

Weekend swing prices skyrocketed as high as $5.50 late Friday morning at Transco’s Zone 6-New York City pool. But as startling as that quote was, it wasn’t representative of the overall market in which price averages ranged from 35 cents higher (Zone 6-NYC) to 20 cents lower (PG&E citygate). Flat to slightly higher numbers predominated, and most of the softness came at western points.

The swing market had a lot going for it Monday, and it showed in sharply higher prices at all points. The biggest factor, of course, was more summer-like hot weather returning in several market areas, particularly through the midsection of the United States. In addition, a tropical wave in the Caribbean drew some attention, the screen went up nearly 16 cents, and there was the normal rebound in industrial/commercial load following a weekend.

In a meeting late last week, the Interior Department’s Outer Continental Shelf Policy Committee took on an environmental flavor by urging that in order to open up offshore moratoria areas for limited drilling, “congressional funding” for the appropriate environmental studies and monitoring will be necessary.

In a meeting late last week, the Interior Department’s Outer Continental Shelf Policy Committee took on an environmental flavor by urging that in order to open up offshore moratoria areas for limited drilling, “congressional funding” for the appropriate environmental studies and monitoring will be necessary.

At least temporarily, the slide in May swing prices came to an end for much of the cash market Thursday. Rockies/San Juan/Pacific Northwest and non-Malin California numbers remained on the downhill path, but eastern and Southwest basin prices generally ranged from flat to a dime or so higher. Most eastern points, though, were only barely above flat.

The swing market continued to move higher Tuesday in the East and the Southwest basins, but at significantly reduced momentum. Most points ranged from flat to up about a nickel with only scattered points, mostly in the Northeast, realizing gains of more than a nickel.

End-of-month convergence wasn’t very effective as mostlate-February swing prices earlier this week were appreciablystronger than March indexes. However, except for dropoffs at a fewscattered points, first-of-March convergence with indexes wasfairly tidy. Cold weather spreading into the South was largelyresponsible for initial March aftermarket prices to gain anywherefrom about a nickel to 20 cents over last-of-February numbers.