Upward

This week’s sudden jolt upward in spot natural gas prices on anticipation of a cold winter is another indication of the “fickleness” of the market, according to the California Energy Commission’s chief natural gas watcher, Bill Wood, who was dismayed by the latest price swing Wednesday.

Although fundamentals seemed to be ignored in Tuesday’s mostlysofter market, traders apparently got a wake-up call Wednesday tothe fact that temperatures remained near or below freezing innearly all areas outside the desert Southwest and were expected tostay that way through the end of 2000. The result was largeWednesday advances at nearly all pricing points, with a few gainsexceeding a dollar.

The swing market maintained an upward track Wednesday, butmomentum slowed with increases of a dime or less at most points.Sources reported little change from Tuesday in October numbers asemphasis began shifting more toward bidweek.

Cash prices were unable to sustain this week’s earlier upwardmomentum and were turning modestly softer Wednesday. Severalsources expected declines to grow greater today since most of thescreen’s dive of nearly a dime Wednesday followed release of AGA’sstorage report, well after cash trading had been completed.

Prices returned to a fairly strong upward track in most marketsThursday except for the Rockies and California, where an extendedhigh-inventory OFO by PG&E put a damper on things.

Transco continues to ratchet upward IT availability into itsZone 6 market-area pool. Effective today until further notice, thepipeline said Monday, 100,000 dth/d each of interruptible capacitywill be available through the Linden (NJ) Regulator Station and forLeidy Line deliveries downtstream of the Centerville (NJ) RegulatorStation. It will offer another 100,000 dth/d of IT between Stations90 and 180 in Tiers I and II, but zero will be available in TierIII (Station 180 through East).

Futures traders were unable to maintain upward momentum earlyyesterday after an initial push above the 40-day moving average toa high of $2.715. January futures fell back sharply in the morningand then traded sideways throughout the rest of the day to end down2.6 cents at $2.629. February lost 1.7 cents to settle at $2.609.The 12-month strip only lost eight-tenths of a cent.

Prices failed to maintain the upward momentum that had begun theweek, slipping lower by a nickel to a dime at nearly all pointsTuesday. Traders were unable to ignore the cumulative negativedemand effect of more than 40 cities setting all-time hightemperature records for the month of November over the previousweek. And although one marketer said the screen had little bearingon day-to-day cash pricing, the nickel-plus drop in futuresprovided no support for cash.

Some Gulf Coast quotes were topping the $3 level Thursday ascash prices resumed climbing after Wednesday’s leveling-off period.Increases ranged from about a nickel in California to more than 15cents at New England citygates and on CNG in Appalachia. A risingfutures screen provided moderate support for cash, but thespreading of colder weather was the chief cause of the price gains,sources said. However, numbers were retreating in several marketsin late deals. A Gulf Coast producer was able to get only $2.90 ina very late Henry Hub trade after the point had been trading in thehigh $2.90s for most of the morning.