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Same Market Song, Second Verse: Flat Again

Same Market Song, Second Verse: Flat Again

Except for some western upticks, the cash market bore remarkable resemblance to a pancake Wednesday. Flatness remained the order of the day at nearly every trading point. And much as on Tuesday, the little bit of price movement that did occur in the East was generally a little lower.

With gas demand currently so weak, a marketer could see nothing preventing a sizable cash downturn other than "Nymex traders trying to hold prices up." He confidently expects the market to soften eventually before heading back up. But for now, "there's not much fun in trading gas these days," he said.

Hot weather and supply cuts were the chief reason for the western price strength, a large aggregator said. High temperatures exceeding 100 degrees in much of the desert Southwest boosted air conditioning load in the east-of-California market, and there was "decent" demand from California itself, he said. That sent San Juan prices higher by a few cents, with Southern California border and Malin quotes up by similar amounts. Southwest and Rockies upticks got further support from an estimated 900 MMcf/d of Canadian gas being taken off the market as NOVA began a pigging operation on its Western Alberta Extension.

Chicago citygates initially were down a few cents, one source said, but Northern Indiana Public Service Co. showed up conspicuously short late in the trading session and prices reacted by rebounding as high as $2.35.

Basis is beginning to tighten for July, a Midcontinent marketer said. Sellers are trying to hold out for index-plus deals, he continued, but for that reason they're not attracting any buyers yet. However, he believes a forecast for above-normal temperatures in the Northeast next week could tip the scales in sellers' favor between now and bidweek.

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