Given modest support by a small screen gain, most cash tradingpoints tended to level off Thursday instead of continuing a slidethat many had expected would last into the weekend. Northeastcitygates constituted the rare weaker market in the East with dropsof almost a nickel as the region cooled off further from a heatwave that set power generation load records early this week.

The day’s biggest decline of almost a dime occurred at thePG&E citygate, where the utility’s high-inventory OFO for today(see Transportation Notes) deterred traders. It was the first suchnon-weekend OFO of the season, according to a marketer. The relatedMalin delivery point fell almost a nickel, but the SouthernCalifornia border was essentially flat as SoCal Gas declined todeclare an OFO-like Overnominations Day, he said. It’s still hot inCalifornia and forecasts are for even hotter weather over theweekend, the marketer added, so he expects to see little decline inwestern prices today.

One source suggested AGA’s report of 69 Bcf in storageinjections last week may have been just enough on the low side ofexpectations to encourage bullish-minded traders. A Gulf Coastmarketer thought prices might even achieve a small rebound Thursdaydue to the storage report and Access futures trading’s positivereaction to it Wednesday evening, but he found most pipes priced”pretty much flat from the day before.”

The cutbacks on gas purchasing by electric utilities have beenquite noticeable in the last couple of days, a Midcontinent tradersaid. He and an area producer agreed the market appears to besettling at least temporarily back into the low-volatility doldrumsthat prevailed prior to the recent heat wave fireworks. Theproducer managed to see a possibility for a flat weekend market.With industrial buyers reducing gas takes, many traders are poisedto snap up packages today at what they expect will be significantlylower prices, he said. “Too many” have that mindset to allow asizeable price dip, the producer concluded. However, should HenryHub futures for August remain around $2.16 while July cash in theMidcontinent stays in the $2.10 neighborhood, “I expect commercialstorage holders to sell physical gas and buy the August Nymexcontract,” he said.

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