The cash market continued Tuesday to show the same signs ofaftermarket strength-and even more in some cases-that it did lastFriday in swing deals done for June 1 only. Many of the Gulf Coastpipes were trading about a dime above indexes, and most otherpoints were at least a nickel above indexes. However, some tradersdidn’t expect the higher prices to last, noting late softness insome markets such as Chicago.

More than one source expressed amazement at Chicago citygatestrading even with or below Henry Hub (Chicago led by 6 cents inJune indexes). One said he averaged $2.33-34 at the citygate beforethe numbers started “cratering” in late activity. With cash numbersmoving so low, “the strategy right now is to hide it [gas] if youcan,” he added. A marketer who regretted going into the month longin the Chicago market said he had some trouble getting rid ofsupplies in late deals.

Air conditioning load has yet to have a big impact on the cashmarket but it’s getting close, said a Houston-based source notinglocal forecasts for high temperatures in the 90s this week.

A western marketer was surprised at the market’s relativepost-holiday strength. Pacific Gas & Electric’s high-inventoryStage 1 OFO, which was in effect Monday and Tuesday but notextended to today, “did not have the price softening effect that Ithought it would,” he said. But according to another trader, it’sonly a matter of time before prices in the West get weaker and havea dampening effect on the overall market. Long-delayed mountainsnowmelt is gaining momentum in the Pacific Northwest, he said, andhydropower output increasingly will displace gas-fired electricgeneration.

A Gulf Coast trader reported hearing guesses of 75-85 Bcf inthis afternoon’s AGA storage injection report, compared to ayear-ago figure of 106 Bcf. If the report comes in below 75 Bcf,”we’re expecting July futures to jump to about $2.50.”

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