It looks like bears are roaming the market woods for the holidayseason, said a producer noting new softness in both futures andcash prices Friday. No nay-sayers to her assessment could be foundas sources agreed that weather and storage fundamentals continue tolook weak for the foreseeable future, barring a surprise blizzardor two. A marketer said he “wouldn’t be surprised if we end up withDecember indexes looking a lot like November’s.”
Spreading chill Friday was unable to provide any support forincremental weekend prices, except for basically flat performancesby the Appalachian pipes and Northeast citygates. That was becausethe major market areas were expected to be warming up again bytoday. Friday’s declines tended to range from negligible to alittle over a dime, with the Rockies, Southwest basins,Midcontinent and intra-Alberta experiencing the most weakness.
One marketer found it interesting to note Chicago citygates andmuch of the West falling quick and hard while Gulf Coast numberscame off slowly and not by much. “That was kind of a flip-flop fromwhat we’ve been seeing” because the Midcontinent/Midwest andWestern markets had tended to lead Gulf pricing earlier in theweek, he said.
While agreeing that December markets look pretty weak at thispoint, a Dallas-area source took this view: “Historically thelowest prices for the month of December are always during bidweek,and because of that I will be taking a good portion of gas into theswing market. If we get a blast of cold, then prices will spike.”
One trader was doing Southern California border deals forDecember in the high $2.20s, while another said his prices wereclustered tightly on either side of $2.30. Those quotes wereclosely converged with Friday’s late-November levels. However, aDecember El Paso-Permian report at $2.05 was about a dime aboveincremental pricing. And one trader’s Chicago purchase for nextmonth at $2.30 was more than 15 cents above Friday’s swing gas. Amarketer was trading December intra-Alberta in the mid C$2.70s,about C20 cents above his incremental deals.
Contrary to the above Dallas-area source, a buyer observed thatif Chicago prices are still in the $2.30 area this week, “I willbuy some of our requirements so as not to be greedy, but I have tothink that the aftermarket will provide the opportunity to pick upgas below that level.”
Fresh basis talk Friday included Chicago at plus 16, ElPaso-Permian at minus 10 and Northwest-Sumas at minus 7. Therelatively tight Sumas basis, which matches that of a couple of theweaker Gulf Coast pipes, is an indicator of how much Canadianprices have strengthened over the past year, a Calgary marketersaid.
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