US natural gas cash prices continue to march higher

Houston (Platts)--23Aug2005

US natural gas cash prices rose again Tuesday, moving as much as 60 cts
higher in some regions. Coupled with the strong 30-ct to 70-ct gains seen
across the country Monday, many prices are well over a dollar above weekend
prices, even in regions with comparatively little weather-generated demand. 
     In the West, for example, Southern California Gas averaged in the
mid-$8.50s/MMBtu, more than 50 cts above Monday. The Pacific Gas and Electric
city-gate also ran up more than 50 cts to settle in the low $8.70s/MMBtu, yet
still lagged behind some other cash points. "It hardly made sense to ship gas
out, since prices were only a little over the variable costs," a California
trader noted. "The strange thing is that our inventory is on the low side, but
there's little in the way of weather to account for the demand. No one wants
to short the system right now," she added. The trader needed some El Paso
Natural Gas in the San Juan Basin, but had to wait for prices to soften some.
Eventually, El Paso San Juan slid to the $8.10s/MMBtu, dropping the average to
the mid-$8.20s/MMBtu, about 60 cts higher for the day. 
     In the Rockies, Colorado Interstate Gas gained more than 60 cts, enough
to propel it to the low to mid-$8.20s/MMBtu, a few cents over the Cheyenne
Hub. "The CIG-to-Cheyenne spread really cratered today. In fact, the spread
was inverted, and that doesn't happen very often," one Rockies trader
reported. 
     Points in the eastern half of the country also ran up hard Tuesday.
Natural Gas Pipeline in the Midcontinent was up nearly 55 cts to average in
the mid-$8.90s/MMBtu, while the Gulf Coast region's Henry Hub settled only a
few pennies less than $10/MMBtu after also gaining 50-plus cents. 
     In the Northeast, Transcontinental Gas Pipe Line zone 6-New York averaged
in the mid-$10.60s/MMBtu, up nearly 50 cts up.

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