The cash market settled down to mostly small gains Tuesday,although quite a few points registered close to flat. The largerincreases of a nickel or more were concentrated in California andthe Permian Basin and on CIG, which played belated catch-up withother Rockies pipes by rising almost a dime.

Fundamentals had little to do with the modest firmness in theEast, traders said. Instead it was more due to an increase of justover 3 cents in August futures and the ability of crude oil futuresto finally surmount the $20/bbl hump Tuesday. An East Coastelectric utility said it has been close to buying only gas forgeneration needs lately because fuel oil was uncompetitivelyexpensive. However, loads related to warm weather will stay fairlylight for at least a couple more days before temperatures startheating up around the weekend, said the utility’s gas buyer.

Fundamentals came more strongly into play at western points.Although hot weather had eased enough that the CaliforniaIndependent System Operator (Cal-ISO) did not have to renew anelectrical Stage One Emergency declaration issued Monday afternoon,enough heat remained in the West to keep power generators buyingsubstantial amounts of gas. In addition, the outage of the ChacoPlant was still having its effect on constraining San Juan Basinsupplies, and Rockies points reacted in sympathy with the San Juanshortfall. The variable cost of transport to move Rockies gas to ElPaso’s Blanco pool in San Juan Basin is about 5 cents, a marketerestimated. In addition, he said, a minor maintenance outage of theBig Piney Compressor Station behind the Opal Hub system was takinga small amount of Rockies gas off the market.

El Paso Field Services clarified the situation at its Chaco (NM)Plant. The plant, which had been yielding 450-460 MMcf/d recentlyat its tailgate, will remain totally down for maintenance throughThursday, a spokesman said. Then a lingering curtailment of about60 MMcf/d will continue through July 22. However, EPFS is talkingwith producers about supplying enough extra gas to mitigate that 60MMcf/d shortfall, the spokesman said.

The continued heat in the West helped pull up Waha prices toonly a penny or two below Henry Hub and approximate parity withKaty, one trader said. However, rain and overcast skies in EastTexas kept Houston Ship Channel numbers somewhat depressed to justabove Henry Hub, he said.

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