Gas buyers could have been forgiven Monday for modifying apopular movie’s catchphrase and screaming, “Show me the weather!” Autility buyer reporting “beautiful” conditions outdoors in theNortheast said it seemed odd that prices could continue to rise inthe face of moderate weather in most major market areas outside theSouth. Cash quotes ranged from flat to barely higher at Northeastcitygates to as much as 15 cents up at the PG&E citygate. Mostgains tended to be on either side of a nickel.

A moderate increase in Henry Hub futures was part of the reasonfor cash firmness, sources said. And although relatively cooltemperatures dominated in much of the Northeast and Midwest, a fewpockets of heat were beginning to surface again in theMidcontinent/Midwest, several agreed.

But storage demand was the consensus choice as primary pricebooster. Some people are starting to think the industry may not beable to catch up on injections this year, a marketer said, “butwe’re plugging away at it.” A Midcontinent producer counted himselfamong those who doubt that the year-on-year storage deficit will beerased. “There is not enough supply to meet current [burn] demand,let alone refill storage,” he said. Midcontinent prices started inthe $2.50s Monday and moved into the low $2.60s “pretty quickly”largely due to heat and the storage situation, the producer said.And as long as the Nymex stays up, “so will cash,” he added.

The weather is about as bearish as it’s going to get and pricesare still strong, “so that really tells you something,” a marketersaid. Wednesday afternoon’s AGA storage report will be critical, hesaid. Injections need to average about 72 Bcf a week for the restof the season to get to full storage volumes, the marketer went on,and the AGA figure is expected to be considerably less than that.There really aren’t any bearish signs on the horizon for thismarket, “and with the [most active part of the] hurricane seasoncoming up.” he said, leaving the rest of his thought unspoken.

It was somewhat fitting that PG&E citygates, Friday’sbiggest losers due to a high-inventory OFO by the utility, would beMonday’s biggest gainers with the OFO fading into memory.

A western trader was a bit surprised that Permian Basin pricesdidn’t rise any higher than they did, noting that El Paso’smaintenance outage of its Keystone Mainline Station is requiringthe shut-in of about 400 MMcf/d today and tomorrow.

Another source expects western markets to be subdued for awhile, saying a number of traders were doing multi-day deals Mondayin preparation for the Colorado Oil & Gas Association meetingthis week.

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