Subject: AGA Storage Report
From: [email-masked]
To: [email-masked]
Cc: [email-masked], [email-masked]
Date: Thu, 25 Oct 2001 12:59:13 -0700 (PDT)

See highlighted text below.  I haven't heard anything else along these lines, but will keep a lookout.

NGI's Daily Gas Price Index 
published : October 25, 2001
Following Downhill Run, Price Roller-Coaster Set for New Climb 
"It's a real roller-coaster in the market right now," said a western marketer in the wake of another shockingly low storage injection report from AGA Wednesday afternoon. After a dive that morning that took nearly all cash quotes between about 10 and 20 cents lower, the trader consensus was that the cash ride is due to turn uphill again today. 
According to AGA, 25 Bcf was injected into storage last week, or about half of where prior estimates had centered. The screen, which had been mildly softer during the morning, took the report as a cue to soar to an eventual 30-cent gain, peaking at an even $3. 
Again reversing the prior-day trend, cash numbers were moving higher as deadline approached, several sources said. It was like the market had some foreboding that the injection volume would fall far short of expectations, a trader of Midwest citygates said. However, the late prices weren't consistently rising but instead tended to be mostly upward with a little backtracking along the way, he said. 
However, the storage report and futures spike weren't the only reason for traders to anticipate higher prices today. A pre-winter storm described as "ferocious" by one forecasting service will be raging throughout the Midwest and poised to enter the Northeast as well. Conditions were already severe enough in the market area of Northern Natural Gas for the pipeline to issue an OFO for today (see Transportation Notes). And although the weather is not likely to be as extreme in the South, temperatures will be falling there as well. 
Other signs of positive fundamentals came from Gulf Coast pipes Transco and Sonat. Saying it had experienced excessive negative transportation imbalances throughout the month, Transco added that unless the situation is alleviated, it become necessary to suspend make-up nominations for the rest of the month. The pipeline already plans to institute more restrictive practices at its pooling points effective Friday. And Sonat estimated that its cumulative system cash-out imbalance for the month was 1,353,933 dekatherms short as of Monday. 
A Northeast marketer doesn't look for the latest bullishness to last long, though. Sunday is expected to be the coldest day of the upcoming cold spell in the Northeast and a warming trend is due to start Monday, he said. Thus most of the heating demand will occur during a weekend period when industrial load is down, he said. 
Naturally an AGA figure far below expectations aroused rumblings of whether it might be as bogus as the 3 Bcf report back in August turned out to be. A large aggregator reported hearing "rumors, but no justifiable suspicions" about the report's veracity. For a marketer, "it's like flipping a coin with AGA these days." He looks for a bigger injection of 40-50 Bcf next week, adding, "It's not that big a deal to get such a small volume [this week] since we're still way ahead of last year and the five-year average on storage inventory." 
But a western marketer said of the AGA figure: "We were stunned. It seemed way too low again." He reported hearing no talk about a potential revision of the injection volume, but was hearing that the federal Energy Information Administration is saying it might take years to develop its own timely storage report as a replacement when AGA quits the storage report game at the beginning of 2002. 
A Midcontinent/Midwest trader said prices appeared to be trying to strengthen a little for November, but little is being done yet because "people are still trying to decide what to do." Another source said November basis for Northeast was up about a penny Wednesday. But a western marketer reported Opal basis sliding from minus 27 cents Thursday morning to minus 31.5-30.5 that afternoon. While the basis was still stronger and the screen lower, it was quite profitable to buy Opal gas now and store it for resale next month, he said.