September prices were a little lower following the weekend, butsome sources saw something of a yo-yo effect with quotes regaininga penny or two in the afternoon as the October screen managed toachieve a small advance. A buyer at the Chicago citygate said hisdeals averaged just over $2.90 on Friday and just under $2.90 onMonday.
Weekend
Articles from Weekend
Transportation Note
PG&E declared a system-wide OFO with a 7% tolerance with aStage I non-compliance charge of $1.00/Dth due to high inventoryfor the weekend.
Futures: A Textbook Reversal Or Bear Trap?
The sell-off continued Friday at Nymex as traders liquidatedlong positions ahead of the weekend in response to some blaringtechnical factors and in anticipation of moderating temperaturesthis week in key gas consuming regions. The September contractprobed lower to finish down 2.6 cents at $2.543 Friday. Estimatedvolume of 78,445 was low relative to the preceding five-straight,100,000-plus trading sessions.
Transportation Notes
For the first time in July Pacific Gas & Electric entered aweekend without having a high-inventory OFO in place. One that hadbeen declared for Friday (see Daily GPI, July 23) was not extended.However, Southern California Gas did implement an OFO-likeOvernominations Day for Saturday.
Post-Holiday Prices Up, But Softening Expected Today
The cash market emerged from the July 4 holiday weekend with astrong performance in which prices ranged from flat at some pointsin the Gulf Coast and Midcontinent to nearly 20 cents higher inCalifornia. The West made a remarkable recovery from last Friday’ssteep dives, reclaiming nearly all of the ground it had lost. Aheat wave over the eastern third of the U.S.-especially acute inthe Northeast-kept prices firm in the producing and market areas.
Transportation Notes
Due to expected high storage injections over the Memorial Dayweekend, Columbia Gas Transmission is not accepting SIT or ISSinjections, imbalance paybacks or Maximum Daily Injection Quantityoverruns today through Monday. Upstream affiliate Columbia Gulf,which has no storage facilities, said Thursday it is not acceptingany payback gas through June 30. The pipe is finishing pigging oflaterals and preparing to begin mainline pigging operations, aspokesman said, so it wants to avoid any problems with excesssupplies.
Funds Buying Lifts Futures to Recent Highs
After pushing the futures market lower into the weekend, thebears were at it again early yesterday as they ushered the Maycontract to its lowest level since last Wednesday. But sellingquickly dissipated, leaving the market exposed to unchecked buying.The May contract finished up 4.5 cents at $2.169 after notching a$2.18 high.
Freezing Temps Buoy Futures into Weekend
What a difference a week can make. Bull traders, nearly ready tothrow in the towel a week ago, have become “cautiously optimistic”higher prices are in their future. And they have good reason tofeel that way because the market entertained a flood of positivenews last week, which gave bulls and bears alike little choice butto bid the market higher. The April contract broke above the 40-daymoving average at $1.80 on Friday and was propelled 5 cents higherby speculative fund buying to finish the day up 9.8 cents at$1.853. Volume was a heavy 108,348. For the week, April gained 22.5cents.
Softness Prevails as Futures Founder into the Weekend
For ninth time in the last 10 trading sessions, natural gasfutures were lower last Friday as sellers pressured theprompt-April contract to its life-of-contract low. No freshfundamental news was seen to lift the market, and as a result itfollowed the long-standing trend 3.1 cents lower to $1.628.
Christmas Break Fails to Stanch Price Bleeding
Traders returned Monday from a long holiday weekend to find thecash market about as weak or even weaker than it had been prior toChristmas, depending upon the market area. A warming trend andsofter futures were cited as reasons. The Gulf Coast, last week’sbargain basement region for gas, was only dropping a nickel to adime. But Western points, which had been riding high on the basisof having the nation’s chilliest weather, fell anywhere from about20 cents (PG&E citygate) to as much as 50 cents (Stanfield).