Tuesday

The bullish sentiment for the aftermarket that several tradershad expressed Tuesday (see Daily GPI, July 1) appeared to bejustified Wednesday as price increases of a dime or more dominatedmost points. The old refrain of “following the screen” was popularagain. But as the screen leads up, so shall it also lead back down,according to some prophecies, and so it was Wednesday. Early pricelevels were retreating late as Henry Hub futures gave up earlygains. Henry Hub cash started at $2.48-49 but fell as low as $2.40late, a marketer said.

Traders who hadn’t finished already wound up their July bidweekbusiness Tuesday and started looking for clues on aftermarketdirection. What they found in swing deals done for today only was amixed bag of flat to up or down slightly from bidweek levels. Butmany sources are expecting an overall strong aftermarket. There maybe some initial softness since the July Fourth holiday weekend isconsidered the lowest demand period of the year. But sources lookfor fundamental cooling load to support gas prices after that.

The trend of Canadian producer acquisitions by U.S. companiescontinued Tuesday with the announcement that Devon Energy Corp.agreed to acquire Canada’s Northstar Energy Corp. and create anevenly balanced oil and gas producer with 53% of its reserves inthe U.S. and 47% in Canada.

PG&E Gas Transmission-Northwest reported Tuesday it hadcompleted unscheduled maintenance on Unit C at Station 7 (see DailyGPI, June 24-26). Throughput capabilities returned to 2,500 MMcf/dat Kingsgate, 2,375 MMcf/d at Station 8 and 1,900 MMcf/d at Station14.

The U.S. Court of Appeals for the DC Circuit Tuesday remanded tothe FERC the Commission’s ruling that interstate pipelines must getprior approval before leasing capacity on other pipelines. Thedecision came at the behest of Coastal affiliates ColoradoInterstate Gas and ANR Pipeline in their petition for rehearing ofa 1996 ruling from a Texas Eastern Transmission case. The Coastalaffiliates maintain the preclearance requirement burdens them witha competitive disadvantage.

The cash market took something of a breather Tuesday followingthe breathtaking uprising that began the week. Several pointscontinued to rise but by decidedly smaller amounts than on Monday.Flat to slightly higher was the general rule, but Rockies numberswere falling as supply outages neared an end and mild weather inthe Western U.S. continued to depress demand. Malin and theSouthern California border also fell by small amounts.

A double-digit drop Tuesday on the futures screen had nearly allsources anticipating softer cash prices Wednesday. They were right,at least in Eastern markets where most points fell by amounts oneither side of a nickel. But markets in the West were surprisinglyfirm. With the exception of Permian Basin and Waha gas in theSouthwest, which joined the East in fallbacks of about a nickel,the West was essentially flat to a few cents higher.

NGPL expected to complete maintenance between Stations 167 and169 on the Amarillo Mainline sometime Tuesday and was tentativelyscheduling nominations through the area for today’s gas day.

Northwest continued Tuesday to ban any on-system balancing,warning that regional temperatures are getting warmer and linepack”is very high.” Shippers were asked to refrain from banking gas onthe system in order to avoid a potential entitlement.