Reaction to Northeast Heat Muted; West Soars Back
Despite the return of hot weather alerts and temporary voltage
reductions among Northeast electric utilities Monday, spot gas
prices found it tough going to build much further on Friday's
moderate gains. Gas demand was fairly strong, sources said, but
not big enough to boost prices any more than 1-2 cents at citygates
and in the Gulf Coast production area. In fact, several Gulf points
turned in flat performances.
Meanwhile, the West again followed the script that had been
written for it early in the July aftermarket. With weekend OFOs by
the big California LDCs ended, western markets saw big turnarounds
from Friday's price dives.
Electricity generators in the Northeast were being pressed by
high air conditioning loads Monday, but there was nothing like the
urgency emerging from the Independence Day holiday weekend when a
number of utilities reported record power sendouts July 6 and a
number of blackouts occurred. Philadelphia-based PECO Energy said
it set peak demand records both Saturday and Sunday this past
weekend, and was among utilities affected by a PJM Interconnection
order for a 5% voltage reduction. However, PJM was able to cancel
the voltage order barely two hours after issuing it, and no
significant power outages were reported. Deliveries in Transco's
Zone 6 and Texas Eastern's M-3 pool were flat to only a couple of
pennies higher, and they're unlikely to achieve any new gains today
because the weather is supposed to turn cooler Wednesday, a gas
buyer in the Northeast said. However, temperatures will heat up
again toward the weekend, he added. Another trader felt Monday's
prices were "sustained" by the heat but not raised much by it.
Midcontinent prices tended to rise a bit higher than in the Gulf
Coast despite flat Midwest citygates, a marketer said, and the
regional warming process will only intensify later this week.
Temperatures put Midcontinent numbers back near the lower end of
bidweek ranges (lower to mid $2.10s, that is) Monday, he said.
Loads are overwhelmingly electric-based, the marketer continued.
"Look at ONG. It has no electric load on it at all and ONG volumes
are very light, whereas the Transok/Enogex systems are pretty
One source had a "gut feeling" that this week's AGA storage
injection report will be in the 80-100 Bcf range.
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