Tuesday’s trading appeared to bear out one Daily GPI source’spredictions Monday of generally stagnant pricing for the rest ofthis week. Eastern numbers formed almost a mirror image of theprevious day’s pattern. Instead of being flat to a little higher,they were flat to a little lower. And prices in the West, which hadbeen busy recovering lost weekend ground Monday, joined inTuesday’s overall flat-to-lower trend with the exception of smallgains at the PG&E citygate and a couple of Rockies locations.
But the tone of another relatively dull day in the spot marketbegan to change in the afternoon with news that a tropical wave hadformed along the coasts of Belize and Mexico’s Yucatan Peninsula.Though the wave would weaken if it moved over the peninsula towardthe Gulf of Mexico, it is the closest thing to a threat to gasproduction that the 1999 hurricane season has produced so far.Other Atlantic tropical disturbances were noted near the WindwardIslands (eastern Caribbean) and Cape Verde Islands (off the coastof West Africa), but were too remote to register on the gasmarket’s radar at this point.
A marketer figured the potential storm activity was the reasonfor Access to continue the uptick begun late in the regular Nymexfutures trading session.
Without factoring in the tropical weather news, a Midcontinentmarketer looks to super-hot weather in the region to bolsterprices. Oklahoma pipes were seeing heavy electric generation loadsTuesday and might even have firmed if not for the early screensoftness, he said.
However, a Northeast trader saw little reason for change in hismarket, citing the region’s mild weather for August. Market-areademand is so weak that it barely covers the cost of transport fromthe Gulf Coast, he said. Everybody is just waiting for thisafternoon’s AGA storage numbers and doesn’t want to commit much inany direction, he added.
One gas industry veteran looking at high prices of natural gasand $3.00 prices for 1% resid on the East Coast this week commentedthat “last winter finally showed up in August. Prices are highernow than they were last December.” He added that the pricingstructure also gives producers a chance to hedge against thepossibility of a similar situation this winter, although “I thinkstatistically we must be due for a cold winter.” He pointed outthat one theory of global warming has greater extremes of heat andcold. “There may be gradual warming, but that’s of the averagetemperature. It may [mean] you will have average warming at thesame time you have much colder winters and hotter summers.”
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