Those bemoaning a relative lack of volatility in much of thecash market since early spring must have enjoyed Tuesday. Thingswere very strong-“to put it mildly,” as a marketer said-in tradingTuesday for both the month of July and the last day of June. It wasobvious to everyone what was heating up prices: heat now andforecasts of more heat later. A strong showing by the August HenryHub futures contract lent further support to cash.

Late-June swing quotes reached over $2.60 in a few cases atopposite ends of the U.S. (Northeast and PG&E citygates). Thebullish mood was infectious enough to carry over even into theMidwest, where temperatures had cooled off since Monday. Chicagocitygates ran as high as $2.37-38, a dime above the previous day’saverage. Western cooling load remained at about the same highlevels as it has the last few days, sending some Rockies pipes backabove $2 and Southern California border quotes into the $2.40s.

ISO (Independent System Operator) New England said it went to aPower Warning-more urgent than Monday morning’s Power Watch (see Daily GPI, June 29), according to aspokeswoman-at 6 p.m. EDT Monday but was able to lift the warning asof 5 p.m. Tuesday. Everybody came through OK, she said, even as theNew England power pool set an all-time sendout record Monday at 21,810megawatt-hours. The ISO had projected Tuesday’s load at 22,000 Mwh butfell about 700 Mwh short, the spokeswoman said.

Swing trading for the rest of the week will be a little tricky,predicted a Gulf Coast marketer, because there are folks sellinggas for the first only, for July 1-2 and for July 1-6. All of it isgoing at a hefty discount to the August screen, leaving buyers in aquandary, he said. Do they pay what might end up being a high pricenow, or do they risk being stuck without gas for the first six daysof August once all the suppliers are sold out? Add to that thewillingness of salt dome storage players to pull gas out at pricesover $2.40, the marketer concluded, and you have a “very dynamic”market over the next several days.

A tropical wave was moving westward in the Caribbean Sea butreportedly showing no signs of development as of Tuesday afternoon.

Several buyers were taken aback by the swift rush higher in Julyprices, in which bidweek increases matched incremental ones of upto a dime at many points. An example was the California buyer whoreported getting an early-morning border offer at $2.42, about anickel up from Monday.Not much later the same supplier calledagain with a new price of $2.49, saying he had gotten that muchfrom someone else. The buyer decided to index her purchases.

A Rockies utility buyer said there was “less gas out there thanI expected.” An Appalachian trader had a somewhat similarexperience, expressing surprise that only a few people tried tosell him gas for the holiday weekend. “Usually they would bebegging you to find a place to park it [gas],” he said.

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