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Heat Lingers But Loses Price-Supporting Touch

Heat Lingers But Loses Price-Supporting Touch

The national heat wave continued through Friday into the weekend, and electric utilities continued to use appeals for customer conservation and other demand-side management tools to keep juice flowing as needed. But the heavy cooling load lost its ability to keep cash gas prices moving higher. Instead, most points were about a dime or more down in flows for the last day of July, and although quotes for Sunday and Monday tended to surpass those for Saturday, they still were below monthly indexes. Sources cited the usual drop in weekend demand, a small screen decrease and forecasts that major market areas will have cooled off a bit by today as reasons for the softness.

The aftermarket saw another schizophrenic beginning since the weekend bridged the monthly divide, and there was no consensus whatever on price direction. Some sources reported distinctive differences between Saturday-only and Sunday-Monday numbers, while others said there was no significant movement between the two periods. And just to twist matters further, most Calgary traders were doing their deals through Tuesday because of today being Canada's Civic Holiday.

One aggregator found its weekend quotes ranging from flat at Northeast citygates between the Saturday and Sunday-Monday periods, while Gulf Coast numbers averaged 3-10 cents higher for Sunday-Monday than on Saturday. But marketers in both the Midcontinent and Southwest said there was little if any appreciable difference in their prices over the entire weekend, and a couple of sources said Saturday deals commanded at least a small premium due to the approaching break in the heat.

Divided opinion also surfaced in market expectations for the first week of August. A marketer expects prices to remain relatively weaker due to power loads being "way off." But while another trader conceded that the heat wave will be considerably milder this week, he added, "At least 'this one' [heat wave] will," meaning that it will be August and another siege of intense hot weather is bound to be just around the corner.

The first two months of 1999's hurricane season have ended with no Atlantic storm activity of any significance to gas production. Such a lack of early storms is normal, one forecasting service said. Last year the quiet period lasted until September, when the season made up for lost time with approximately a hurricane a week.

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