In a huge turnaround of the cash market spurred by the arrivalof weather that finally appeared more wintry than springlike,prices were skyrocketing Monday from the abyss into which they hadsunk prior to the weekend. To say that double-digit increasescharacterized trading was a gross understatement when many pointswere rising by 50-60 cents or more.
That (50-60 cents) was also an accurate description of thehypervolatility that ranged at many points. One aggregator’s HenryHub range went all the way from the mid $1.30s to the low $1.90s.Numbers were rising rapidly as trading proceeded, sources said.
A cold front was moving eastward in a steep slant extending fromWest Texas into the Northeast. However, it had not reached theEastern seaboard as of Monday. The day’s volatility and upwardtrend allowed one trader to buy non-New York City deliveries to theNortheast from the $1.60s through the $1.80s early on and take theminto the Big Apple part of Transco Zone 6 where he could sell ashigh as $2.30.
Snow was causing road icing in the panhandles of Oklahoma andTexas, but a marketer reported hearing of no well problems there.There were a few Rockies freeze-ups in the Opal area, he said, buttheir impact was insignificant.
Because Eastern markets had gone so much lower than those in theWest last week, the Eastern rebounds tended to be much greater.While excess linepack problems were easing for several Gulf Coastpipelines Monday, El Paso and Pacific Gas & Electric wereextending low-linepack OFOs (see Transportation Notes).
Reporting weekend snow in the Upper Midwest, one trader said,”Up till now we’ve been raking [leaves] instead of shoveling[snow].”
A Northeast buyer expects prices to continue up a bit furtherand then start leveling off, noting they still have not gotten backto December index levels. However, a Western marketer didn’t thinkMonday’s jumps were justified. A response to forecasts of colderweather was reasonable, “but just not this big.” He also thoughtproducer shut-in scares had helped “hype” the market, adding heremains basically bearish.
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