Virtually

The April aftermarket was off to a very strong beginning inswing deals done Wednesday. Virtually every point was trading abovebidweek levels and in some cases much higher. For example, a buyerwho paid in the mid $1.70s for April baseload at the SouthernCalifornia border reported a $1.90-95 swing range. Most sourcesagreed that the incremental price strength derived almost entirelyfrom “following the screen” upward.

As expected, Christmas Eve was pretty much a non-event in thecash market. Virtually all holiday weekend business through todayhad been taken care of Wednesday, and though a number of tradersdid put in brief appearances at the office Thursday, they didlittle more than check what futures was doing in an abbreviatedtrading session. “We had to come in for the first half of the dayor else count it as a whole vacation day,” one marketer commented.

Coral Energy became the principal gas supplier to LDCMountaineer Gas Co. through an agreement giving Coral management ofvirtually all of Mountaineer’s total firm transportation andstorage entitlements. Effective Nov. 1, Coral will begin supplyingMountaineer, West Virginia’s largest LDC, about 25 Bcf/year forthree years. Gas will be supplied at a fixed price. Local gassupplies are not part of the deal and will continue to be managedby Mountaineer.

It seemed that virtually everyone in the gas trading communitywas glad to bid a not-so-fond farewell to a September fraught withhurricane hassles and get on with an October in which theaftermarket is starting out very strongly. Swing deals being doneWednesday for today’s flow generally ranged from 10 to 20 centsabove bidweek averages. Late quotes for October baseload also wererebounding after most points had sunk steadily to the bottom end oftheir ranges.

So far cash prices are following the script surrounding theFourth of July holiday weekend. As virtually every trader hadexpected, the market fell hard Thursday. “There were just no buyersout there,” complained one marketer. It was a fairly quiet daysince some gas had already been committed for the weekend onWednesday or earlier, and many people were anxious to get it doneand clear out early for the holiday, said another source.

The major accord signed by Canadian gas industry stakeholders lastweek that virtually assures construction of the Alliance Pipelineproject (See GPI Daily, April 9) hasmade the fate of the competing 1.4 Bcf/d Viking Voyageur projectextremely doubtful. Voyageur sponsors TransCanada PipeLines andNorthern States Power were in meetings all day Monday and Tuesday andan announcement is expected later this week. One Voyageur officialsaid all options are possible, including shelving the 800-milepipeline project.

The cash market hemmed and hawed again Tuesday morning, leavingprices virtually where they were last Friday. However, the futuresmarket would not go quietly. After a fairly unremarkable session tostart the week, the bulls once again had their way, pushing the Maycontract up more than 13 cents for the day(please see futures story). Cash prices were mostlyimmune to the strength.

Cash prices rose by a nickel to a dime virtually across theboard Monday in what sources saw as “purely a weather play.”Liquidity was a bit tighter than usual as many traders hurried tofinish and head for this week’s trade fair in Houston, one pointedout. Also, a fair amount of gas had already been committed throughthe end of the fair, he said.