The moderate price slide that defined much of the cash marketsince late last week reached a plateau Tuesday as flat to slightlyhigher pricing dominated reports. The correlation of cash movementwith a tight-ranged screen was very high, sources said. A gradualwarming trend was just starting to be felt in the major marketareas of the Midwest and Northeast, they added, but it was lendingsupport to small price increases at citygates and in the Gulf Coastand Midcontinent regions.

All points were near their highs at the end of the tradingsession, according to a Gulf/Appalachian marketer. That wasdefinitely due to a short supply squeeze developing as Northeastbuyers got more active, he commented. The marketer said he coulddetect by the pattern of buying that some nuclear plants in themarket area are underperforming. However, he noted, until now theutilities mostly have been rewarded over the last week by waitingfor higher prices.

One trader believed South Texas prices into Texas Eastern werestrong and keeping pace with many non-premium Louisiana pointsbecause of Line 41 in the pipe’s West Louisiana pool being out ofservice through Sunday. In a related South Texas note, a marketersaid a pig stuck in the pipeline was restricting deliveries fromChannel and HPL into Florida Gas Transmission-Zone 1. “We justmissed getting cut [Tuesday], but have already told we will be cut[Wednesday],” she said.

Power generation load remains somewhat depressed in much ofTexas, a Houston-based trader said. “It’s just not hot anywherewith all these thunderstorms,” he added.

Oklahoma intrastate prices are starting to see a premium toneighboring interstates because Oklahoma Gas & Electric hasbeen a significant buyer in the last several days after losing acoal plant in a tornado recently, a Midcontinent source said.

A marketer was unsure what market impact a Transwesterncessation of California border deliveries at Topock (seeTransportation Notes) starting Friday might have but thought itlikely would be “little to none” over the low-demand weekend.However, because the outage will constrain 400 MMcf/d at the borderthrough the end of the month, she saw a chance of it boostingprices next Monday and Tuesday for El Paso border deliveries and inthe Rockies and western Canada.

A Calgary trader reported seeing a “lot of apathy” for the Julymarket so far; “to us, most people are bearish” because offorecasts for cooler weather in the Pacific Northwest early nextmonth.

One aggregator reported doing July basis deals Tuesday at plus10.75-11 for Columbia/Appalachia and plus 17.75-18.25 for TexasEastern M-3. However, he was starting to “wonder what people aregoing to do with gas for the first six days of July with all theholiday-related plant closings.” That may be a good argument forpostponing most baseload until after the July Fourth holidayweekend, he said.

A couple of sources, one in the Gulf Coast and the other in theMidcontinent, agreed that index premiums for July essentially nolonger exist, with the Gulf trader remarking, “They aredisappearing right in front of my eyes.” Last week almost theentire Gulf Coast market was being talked up at index plus0.25-0.5, she said. “Now you are hearing index flat or indexminus.” That is forcing some sellers to think seriously abouttaking their chances with the aftermarket, she said. TheMidcontinent source said brokers were making offers at index minus0.75. Bidweek is shaping up to be a real “test of nerves,” heconcluded.

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