For a while Thursday it looked like August prices would keeprunning higher based on a strong screen, continued heavy powergeneration load and Wednesday afternoon’s super-bullish storagereport. However, the uptrend crested and began subsiding a bit whena late “meltdown” occurred in September futures, sources said.

Naturally buyers and sellers held differing opinions about themild reversal in bidweek numbers. A western buyer said he held offThursday after the previous evening’s run-up in Access futuresactivity, “but now that the screen is back down about 15 cents, Iwill probably step out and buy some more [today].” A Midcontinentproducer, on the other hand, said most Panhandle Eastern deals hadbeen done in the mid $2.50s, but some folks were looking for gas inthe mid $2.40s after Thursday afternoon’s downturn. However, in hisperception “there seems to be a good deal of demand left out there,and I expect prices to start coming back up” this morning.

An industrial buyer reported experiencing “sticker shock” athaving to fork over $2.60 for a Houston Ship Channel package. Evenwith prices subsiding slightly Thursday, he said, they still seemsteep both for August and for the November-March offers he isgetting.

Looking ahead to the aftermarket, a Midwest marketer isexpecting lower prices. Saying he expects the Chicago citygateindex to be around $2.69-70, he added, “Given the choice, I wouldrather be short from $2.70 than long.”

Except for a small touch of Rockies/San Juan flatness, it wasonward and upward again in the late-July swing market. Most pointsranged from a nickel to a dime higher, boosted both by the smallstorage injection report and the intense heat wave dominating mostof the U.S. except for the West Coast. Futures pricing wassupportive, also, since it didn’t take a dive until after cashtrading was over.

Electric utilities again struggled to meet customer demand,especially in the Midwest, where Chicago and Michigan citygatesrose by almost a dime. Many power generators continued to breakrecently set load records. The PJM Interconnection independentsystem operator issued a hot weather alert for Thursday throughSunday and at mid-afternoon Thursday issued a “Request to PurchaseEmergency Energy.” Florida Gas Transmission issued an OFO due toheavy market-area demand.

No letup in the heat is in immediate sight. Utilities such asCinergy in Ohio and Consumers Energy in Michigan asked theircustomers to maintain their energy conservation efforts throughtoday.

Thursday’s market suffered from another kind of trouble astraders who used Altrade’s electronic trading system were cut offfor about eight hours, from 12:15 CDT until about 8 p.m. CDT. Aspokesman said those cut off represented about 50% of traders usingthe system. Altrade’s system had been carried through Internetprovider IBM, who chose yesterday, the heaviest gas trading day ofthe month, to transition its system over to its new owner,AT&T.

Customers who use Altra’s direct connect system were notaffected. All Internet-based orders were put on hold to protectthose users who were disconnected. Altrade has been assured theproblems are corrected and trading should proceed as usual today.

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