Cash quotes were mildly softer Monday, with price movementranging from none (flat) to down about a nickel. A July futuresdrop of just over 7 cents was the obvious explanation for cashweakness to many sources. A Houston-based aggregator asserted that”lack of weather” in both the Gulf Coast production area andNortheast market area exacerbated the screen’s negative influence.Forecasts continue to call for hotter temperatures later this week,he said, “but it’s not happening yet.” Even with Monday being theofficial start date for summer, recent high thermometer readings inthe South are only rarely getting above the 80s, he said.

But to a marketer, weather was the reason why Midcontinentprices tended to resist the downturn more than in other reigons.”Cash wanted in the worst way to fall more than it did today” butheld up due to fairly good utility demand, the marketer said.Midcontinent temperatures are only in the 80s but humidity is high,he added.

A western trader said he continued to see substantial UEG(utility electric generation) demand in the Southern California andeast-of-California markets. Border quotes were flat to off only acouple of pennies in most cases. But Malin and PG&E Citygatenumbers fell by about a nickel as PG&E extended ahigh-inventory OFO into its third straight day today. That closedthe basis differential between the citygate and the SouthernCalifornia border to only 11 cents or so, “which is pretty small,”a marketer said.

While the East is expected to get hotter this week, weather isheaded in the other direction out West, one source said. Thewestern heat is supposed to taper off throughout the week and then”really fall off” at the end, leading the source to predictsteadily declining regional prices through Friday.

July business is extremely tentative at this point, primarilydue to “so much uncertainty” with the power and futures situations,according to a Canadian marketer. A Texas source was hearingChicago basis talk of plus 3-3.25, down about a point or so fromJune. He also reported offers at minus 11.25 and bids at minus11.75 for the Midcontinent pipes in general. July basis gets alittle tighter every time Henry Hub futures go down, he said.

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