The majority of cash points were down a few cents Thursday butstill sticking around in the vicinity of index levels. Despite somenegative influences, the California market even managed to maintainat least a nickel premium to index. Even with a huge swath of rainhaving a cooling effect on the Midwest and Northeast market areas,heat remained the big reason for only a modestly softeraftermarket. A screen drop of almost 9 cents had little impact oncash.

A Chicago trader quoting citygates around $2.30 said it was aquiet day because a lot of people had already done swing dealsthrough July 6. Other sources also reported light activity. Earlyon prices were off in the Northeast, a marketer said, but later afew buyers showed up short and generated a small rebound.

A System Underrun Limitation extension by Northern Natural Gas(see Transportation Notes) was not causing any problem yet, said atrader quoting demarc prices flat to a penny or so down in the low$2.20s. However, since the SUL will last at least through Sunday,problems could surface today, he said.

California was a strange market in bucking logical tendencies, acouple of sources agreed. Even with a cooling trend starting in theGolden State, an OFO-like Overnominations Day limiting deliveriesinto the Southern California Gas system and Pacific Gas &Electric continuing to project excess linepack through Sunday,prices remained a nickel or more above index at all three majorpricing points (Malin, PG&E citygate and Southern Californiaborder). One trader didn’t believe the PG&E linepack warningwas serious because a pigging operation starting today on PG&EGas Transmission-Northwest will limit deliveries at Malin, he said.

Meanwhile SoCal Gas was riling at least one marketer, who saidthe giant LDC gave no advance warning of the OFO and then came outand bought gas itself at lower prices after news of the OFO gotaround. Pretty much all of the day’s trading had already occurredby then, “so what you got was pre-OFO quotes,” she told Daily GPI.Instead of penalties, SoCal just buys any overdelivered gas fromthe offending party, she said, recalling that a purchase price of88 cents/Mcf was in effect during an April OD.

Based on weather forecasts, “I don’t think people will want togo home [today] in short positions,” a Midcontinent trader said.For that reason he saw good chance for moderate firmness in weekendprices.

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