The price plunge that had seemed to be gearing up Wednesday cameto a quick halt Thursday as cash quotes were “up a ‘smidge,’ maybea penny or two,” according to a trader doing business in theMidcontinent and Southwest. Sources dragged out the old refrain of”following the screen,” although the tiny upticks in cash laggedfar behind the near-dime increase in the Henry Hub futures contractfor June. Essentially the screen strength arrested a developingbearish trend for cash.

A marketer reported substantial gas buying by Texas electricutilities; after all, “it’s hot down here,” he said.

Many people tried to push prices down early, according to aMidcontinent trader, “but we heard some early flat offers and thuswaited to make our sales until after some small increases hademerged.”

Eastern points are trading for more than a dime below indexes,but virtually all of the West is still in the vicinity of indexlevels. Maintenance outages, both planned and unplanned, areplaying a large part in the relative western firmness. Wednesdaywas the last day for San Juan Basin trading to be affected bydowntime at the Milagro plant, which ended Thursday, an aggregatorsaid. However, the basin will lose a net of more than 700 MMcfMonday when the Blanco plant takes its turn for maintenance (seeTransportation Notes), he said. A marketer said he was alreadygetting calls for Monday-only San Juan gas and is looking for priceincreases today in both the San Juan and Permian Basins.

Malin and PG&E citygate numbers are a few cents over indexlargely due to constraints on the PG&E GasTransmission-Northwest system (see Transportation Notes), amarketer said. Because the constraints are upstream of Stanfield,they also are supporting prices at Sumas and Stanfield, he said.

One factor that may have helped prop up gas prices recently isthe cost of penalties for electric utilities failing to toe theline on nitrogen oxide (NOx) emissions, according to a marketanalyst. Paul Messerschmidt of Energy Security Analysis Inc.pointed out to a GasMart/Power ’99 audience earlier this week thatMay 1 was the start of the 1999 ozone season in the Northeast. Forplants without the required NOx credits the penalty is $6,600 perton, “which creates a NOx penalty for coal, whether it’s eastern orwestern, north of $15/MWh,” Messerschmidt said. “At that priceyou’re going to think long and hard before running a coal plant.Some utilities that aren’t sure how many NOx allowances they aregoing to need for this year may have decided to front-load some oftheir gas consumption early in the ozone season.”

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