Those who had expected cash bullishness to continue Wednesday,based on the July futures contract’s move to previously unknownheights on the previous day, were in for a big disappointment.Wednesday’s screen achieved most of its drastic downturn while cashwas still trading. And while hot weather remained fairly severe onthe West Coast, it cooled off considerably in the Northeast.

The result was swing price declines ranging from about a nickelto a little more than a dime at most points. Transco’s Zone 6-NYCpool stood out with a plunge of about 30 cents into the $4.80safter having traded over $6 in some deals as recently as Monday.ISO New England did not renew a Power Watch declaration Wednesday.

California markets stood out for the opposite reason: they wereflat amid a sea of softness. The California Independent SystemOperator (Cal-ISO) continued declarations of a Power Watch andStage One Electrical Emergency into a third day Wednesday but didnot find it necessary to repeat Tuesday’s Stage Two Emergency.Electricity prices were still high, however, as the PacificNorthwest remained abnormally hot and unable to spare much if anyexcess power to the Golden State. The 16-hour peak average fornext-day prices on the California Power Exchange was $509/MWh, “andthat is close to as high as we have ever seen it,” an aggregatorsaid.

PG&E citygates began trading at the day’s higher levels inthe mid $5.10s on the possibility that the utility might issue alow-linepack OFO for today, a marketer said, but then fell as lowas $5 after it was announced there would be no OFO.

Waha and Katy traded dead-even in the mid $4.40s, which was badnews for those who like to move Waha gas eastward. Waha traderswere “still hearing the siren call of West Coast power generators,”said one producer, explaining Waha’s relative strength.

As so often happens, it was a futile exercise for many cashsources trying to delve into the psyche of Nymex activity. AGA said73 Bcf had been injected into storage last week, a figure whichfell right in the middle of prior estimates offered Tuesday toDaily GPI. That meant the year-on-year refill deficit grew byanother 18 Bcf. But the screen didn’t even wait on the afternoonreport to growl like an angry bear. The July contract was muchlower throughout the morning and kept falling after the report fora total plunge of more than 30 cents on expiration day.

“Apparently Nymex thinking is that whatever you thought the AGA[figure] should have been, do the opposite of what seems naturalwhen it actually gets released,” mused one Canadian trader.However, an intrastate Texas marketer offered this rationale: “I’mnot that worried about refilling storage between now and November,and it looks like the Nymex traders aren’t either.”

Usually one would expect July basis to strengthen when thescreen takes a dive like yesterday’s. Not so, said a Northeasttrader. He reported basis shrinking to plus 16 forColumbia-Appalachia; plus 20 for CNG; plus 36 for Texas Eastern M-3and Transco Zone 6 (non-NYC); and plus 51-52 for Transco Zone 6(NYC).

However, the opposite seemed true for El Paso-Permian, where acouple of marketers observed wide basis ranges. One said his basisdeals had ranged from minus 5 to minus 15 “and all over inbetween.” The other said Permian basis was being offered at minus 2Wednesday afternoon, considerably stronger than the minus 13-12that morning.

A large aggregator reported finding few buyers for South Texassupplies. “Most of my customers are marketing companies, and theyappear content to wait out the holiday weekend and see what nextweek brings,” she said. (For the record, the National WeatherService predicts above normal to much above normal temperatures forTexas and the Southeast in its six- to 10-day forecast.)

The Atlantic hurricane season remains a non-event so far. Whatwas left of Tropical Depression #2 moved into the eastern CaribbeanSea Wednesday but it was not expected to strengthen.

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