Prices failed to fake out anyone Wednesday. With Tuesday’s latesoftness on the Nymex screen carrying over into Wednesday and thesubsidence of “the big bakeoff” in the Northeast, as one producercalled it, it didn’t take a crystal ball to make a bear marketcall. The larger declines on either side of a dime tended tocluster in the Gulf Coast, Appalachian, Northeast, Midcontinent andMidwest markets, while western drops generally were around a nickelor less. Unlike the late screen-related fallbacks reported Tuesday,traders said a number of points saw slight upticks in late dealsWednesday.

Everything has pretty well calmed down in the Northeastfollowing a Tuesday in which many of the region’s electricutilities set records for daily power sendout, a marketer said. Shewas unaware of any that were still under voltage restrictions orappealing to customers for energy conservation Wednesday. Theeasing of the heat strain was reflected in new PJM[Pennsylvania-New Jersey-Maryland plus Delaware] Interconnectionprices for next-day transmission being reported in the $40s/MWhcompared to well over $100 the day before.

A Midcontinent marketer was glad to see gas prices falling,saying his company had gone into July in a moderately short supplyposition. A Midcontinent producer wasn’t so glad about thedownturn, but he said the market started the day with most pipes inthe area being bid as low as $2.08 while offers were at $2.13. Manytransactions, particularly on Panhandle Eastern, were closed at$2.10-12 between 9 and 9:30 a.m. CDT, he said. After prices beganto climb in the late going, he was able to sell gas at NorthernNatural’s demarcation point for $2.18.

Most sources were in consensus that there’s little reason tolook for any price turnaround before next week, if then. Theypointed to forecasts for moderating weather and, while disagreeingon whether the AGA storage injection figure of 69 Bcf was a littlelower or a little higher than expectations, essentially ruled itout as a significant market factor.

A Midcontinent trader, noting that his Chicago citygate quote of$2.20 was already 13 cents below the first-of-month index, foundmore reasons for a bearish outlook. It’s the storage injectionseason, he said, yet it seems like hardly anyone is injecting gas.He also cited history: “If you look at Midcontinent prices lastyear, they entered July in the $2.30s and exited in the $1.90s.That could very well happen again. This is the time of year whenthings really fall off.” The trader said he does business withpower generation plants and is getting more sell calls from themthan buy calls. One plant is operating at only 20% of its gas burncapacity, he said.

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