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Swing Prices Flat; July Numbers Reported Up a Bit

Swing Prices Flat; July Numbers Reported Up a Bit

A holding pattern developed Thursday at the majority of trading points, which were flat to up or down a penny or two for an overall reading of flatness. The market was hardly a model of consistency, though, as price movement ranged from about two cents lower in the Rockies to increases of about a nickel or more for the Appalachian pipes and Northeast citygates. High temperatures in the mid 80s Thursday in the dry Northeast were a close match for those in the rain-drenched South.

Rain continues to cap Southern cooling demand at unusually low levels for late June, noted a Texas aggregator. But once the rain goes away, she said, there could be as much as an extra 1 Bcf/d of demand appearing in the cash market from the resultant increase in power generation. She added that intraday buying of Permian Basin gas flowing to Waha started to pick up Thursday as temperatures crept higher in the mostly dry North Texas region.

A buyer who paid $2.31 early at the Chicago citygate said he lived to regret it as later quotes dipped into the high $2.20s due to "no weather in Chicago."

A short supply situation occurred in late San Juan Basin trading, a marketer said. Late prices ran as high as $2.06 as low liquidity left some buyers out to dry, she added. Despite the reported squeeze, an unplanned outage on Transwestern's San Juan Lateral (see Transportation Notes) didn't seem to be causing any big problems, although it may have been responsible for some turnbacks of San Juan gas late Wednesday, a producer said. He was surprised at no change in Southern California border prices Thursday even with Transwestern beginning a total outage of Topock deliveries (about 400 MMcf/d) today. The spread between San Juan Basin and the border has widened from 30 cents to about 32 cents, he said, but that's not much difference for such a sizeable outage. He speculated that increased supplies on El Paso and from the Rockies may have kept border pricing flat.

Pacific Gas & Electric did not reinstate a high-inventory OFO but was projecting its linepack would be at least 200 MMcf or more above target volume for Thursday through Sunday. PG&E citygates were flat Thursday.

It's looking as if July will see higher prices than June, said a source reporting general Midcontinent basis at minus 12. A western trader agreed, saying July prices were a little higher Thursday than Wednesday's levels. He quoted fixed pricing of $1.92-95 at Sumas, $1.98-2.00 for the Rockies in general, and $2.15-18 at Malin.

A producer was doing basis deals at minus 1.75 for TGT Zone SL, minus 5.75 for Trunkline-East Louisiana, minus 7.25 for Tennessee's 500 Leg, minus 3.5 for Columbia Gulf-onshore and plus 11.25 for Columbia-Appalachia. However, she went on, "I'm doing a lot more indexing than basis."

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