The screen may have decided to take a breather Monday afterflexing its muscles so impressively last week, but the heated cashmarket showed no signs of settling down. Western quotes stagedtheir by-now-familiar retaking of ground lost over the weekend, andthis time they actually shared in the general bull market by risingin greater amounts than they had fallen on the previous Friday.Eastern points, on the other hand, continued to build on the upwardtrend they had seen all of last week.

Just gazing at new eastern price quotes, many traders likelywould have guessed the market was in the middle of acolder-than-normal winter rather than the dog days of summer.Transco Zone 6-NYC quotes actually peeked over into $3-plusterritory Monday. Continued price hikes were very much a powergeneration play, sources agreed. The heat wave dominating most U.S.weather outside the near-shore Pacific coast was not causingemergencies but still pushed power generation capacity to theutmost.

Chicago citygates started strong in the $2.60s but fell backlater, a marketer said. He perceived the retreat as caused bypeople withdrawing storage gas to sell into such a strong market.But a producer saw the storage withdrawal strategy as “kind of likerobbing Peter to pay Paul. You’ve got to put back that storageeventually, so do you pay up now or pay up later?”

The market area was much stronger than the Gulf Coast, said aNortheast-oriented marketer. However, valve replacement work onTransco should end by midweek, she said, and that will open someextra IT at the Linden, NJ constraint point.

Although double-digit increases dominated all markets, thelargest ones occurred in the West, led by a San Juan Basin reboundof more than 30 cents. Pacific Gas & Electric, after surprisingtraders with the absence of a high-inventory OFO Saturday,fulfilled their expectations with one Sunday but did not continueit Monday.

Power generation is obviously driving the swing market, aMidcontinent producer noted, and because the high temperatures areexpected to last through Friday, that should create strong bidweektrading. “After that, who knows?” he asked rhetorically. Theproducer reported August basis at minus 9.75-10.75 for PanhandleEastern and NGPL-Midcontinent slightly weaker at minus 10.75-11.75.A marketer pegged Michigan citygate basis at plus 7.5 for ConsumersEnergy and plus 8-8.5 for MichCon. He saw Chicago at plus 6.5-6.75,but another source said that while Chicago had been plus 6.5earlier, he perceived it as tightening a bit to plus 6 Monday.Other basis talk included Niagara at plus 7, Columbia Gulf-onshoreat minus 2.25, TGT Zone SL at minus 1.5-1.75 andColumbia-Appalachia at plus 14.5-14.75.

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