Robust storage levels push down Midcontinent spot gas prices

Houston (Platts)--4May2006

Midcontinent spot gas prices tumbled as much as 30 cents Thursday as
buyers strayed from the spot market, having "realized that storage is robust
and, if anything, they need to be drawn down before they overflow," one trader
said.

"There is nothing new. The market was slow, and I can't comment on it at
all," a Dallas-based trader quipped about the sluggish trading session. "I
don't even have a bad joke to tell."

AccuWeather forecasts called for continued showers across much of
Oklahoma into the weekend, and with temperatures nearly 10 degrees Fahrenheit
below normal in the mid- to upper 60s, power generation demand across the
region fell, a trader said.

The premium between Natural Gas Pipe Line Co. of America's Midcontinent
zone and the Cheyenne Hub expanded to more than 15 cents Thursday after
holding at less than a dime Wednesday. However, the spread hardly covered
variable costs and continued to offer Rockies producers little reason to ship
supplies to the Midcontinent region.

Natural's Midcontinent zone declined nearly 30 cents compared with
Wednesday to average in the mid- to upper $5.30s/MMBtu, while ANR Pipeline in
Oklahoma averaged a few cents higher after a similar loss.

Natural's Texok zone's premium over CenterPoint's East zone widened by a
few pennies compared with Wednesday, reaching nearly 20 cents, after Texok
shed about 15 cents to average in the mid- to upper $5.90s/MMBtu and
CenterPoint lost about a quarter to average in the low to mid-$5.70s/MMBtu.

--Sean Murphy, sean_murphy@platts.com

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