Cash prices ignored a falling screen and the usual lower gasdemand of a weekend, instead using growing heat in the Northeastand Midwest to fashion an overall flat market Friday. The East hadmore of the mild firmness while small declines tended to clustermore in the West. That was best illustrated by the day’s extremes:increases of more than a nickel for citygates in the hot and humidNortheast, as opposed to a drop of a nickel at the PG&Ecitygate, where the utility had a high-inventory OFO in effect (seeTransportation Notes).

A Gulf Coast producer, “wishing it would stop raining for awhile,” said the week-long period of rain continued to dampenSouthern air conditioning load into the weekend, so it must havebeen warmer market-area weather that was mostly responsible forslightly higher prices on several Gulf pipes Friday. It’s certainlynot like last year’s drought period when “we were under a firewatch because it was so hot and dry that some Fourth of Julycelebrations were canceled.”

Besides the increase in cooling demand for gas, a Southeasternutility buyer also saw higher weekend load than usual fromindustrials. He explained that while industrial plants typicallyshut down or curtail operations for a holiday weekend such as theFourth of July, they tend to make up for it with higher demand forthe weekends on either side of the holiday.

Noting the dime spread that has opened between Appalachian pipesCNG and Columbia Gas (TCO), a large aggregator said it was becauseTCO is limiting storage customers to having only 60% of theircontract volumes injected as of the end of June. That leaves theTCO shippers with fewer options on where to take their gas, headded.

Several sources perceived July pricing as a penny or so higherFriday, although one trader said Michigan citygates slipped a tinybit. He pegged Michigan basis as plus 4.5-5.5 while Chicagoremained at plus 3-3.5.

Basis was a little weaker (that is, larger negative numbers andsmaller positive ones) in the Gulf Coast, a marketer said. Buyersare “very lethargic” about July business, he said. That had sellersgetting a bit more aggressive by lowering their offer prices.

Most LDCs continued to stay on the July sidelines, with someindicating they may postpone most purchases until after theholiday, according to a large aggregator. The market “could getugly” for the first few days of July, he continued, “but I expectit to take off after the Fourth of July weekend because by thennormal summer heat should be over a much wider region than it isnow.”

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