The furious upward rush of swing cash prices finally ran out ofsteam Tuesday, leaving most of the market in a consolidation andstabilization mode. Except for a nickel rise in Transco’s Zone6-NYC pool and milder increases on several Midcontinent pipes, flatnumbers were the order of the day at nearly all eastern points.Although the Midwest and Northeast market areas had cooled off abit since Monday, forecasts for a heat wave to re-intensify laterthis week kept prices from retreating, a marketer said.

“I’ve got to get used to saying ‘three’ instead of ‘two’ [in thedollar place],” said a buyer after erroneously reading a TranscoZone 6-NYC quote. Although Zone 6 non-NYC and Texas Eastern M-3remained below $3, most quotes for the NYC pool were solidly over$3.

Meanwhile, moderate softness dominated western markets. A smalldecline at the PG&E citygate combined with a small rise at theSouthern California border to bring the two points just over anickel apart, compared to a more normal gap of about 15 cents, onetrader noted. “Essentially what that means is that San Francisco isvery comfortable [and cool] compared to Los Angeles,” he said.

A dropoff in swing activity was evident as many sources hadalready either baseloaded various points for the rest of July orcontinued to clear the decks for bidweek business.

A producer quoting Houston Ship Channel basis at plus 1.25-1.5said intrastate Texas basis is “very weak compared to theintrastates.” He sees no reason at all to question the recentrun-up in August futures. “Some people may try to deny it, butthere’s just not as much supply out there as there used to be,” theproducer said. “Just think, last December we had a 700 Bcfyear-to-year overhang in storage. Now we’ve worked that off and arein deficit.” That’s why the Nymex contract is so strong, heconcluded.

A couple of sources said Malin was trading in the upper $2.20sfor August. One was hearing PG&E citygates around $2.61 andsaid the Southern California border is about a dime below that.Another trader pegged border basis at plus 1-3 and said the border,San Juan-Blanco and Permian were all trading at a slight premium(less than a penny) over index.

The modest premium in index deals was in effect in theMidcontinent also, according to a marketer who said theMidcontinent pipes in general and Chicago citygates were being bidat index plus 0.25 and asked at plus 0.75.

Other basis talk Tuesday included: Transco Zone 6-NYC at plus27-28; Texas Eastern M-3 at plus 25; Transco Station 65 at plus0.5-1; Chicago at plus 6-6.5; ANR-Southwest, Panhandle Eastern andNGPL-Midcontinent pool all at minus 10-11; and NorthernNatural-demarc and Ventura at minus 8-9.

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