The geographic divide between gas markets seldom has been moredistinctive than it was Friday. Opposite corners of the U.S.represented the extremes: Northeast citygates skyrocketed by nearly20 cents while the OFO-hit Southern California border plunged byabout 20 cents. In general it was another case of East being Eastand West being West, and the twain had almost nothing in common.

Quotes for eastern markets gained upward momentum going into theweekend, sparked by more record-setting heat with little let-up insight and the second straight day of double-digit gains on thefutures screen. Almost every point rose by a dime or greater amid awidespread cacophony of electric utilties reporting new powerdemand records, appealing for energy conservation, curtailinginterruptible customers and/or warning of potential rollingblackouts.

It took Duke Power and Commonwealth Edison, which had announcedsetting load records Wednesday (see Daily GPI, July 23), only oneday to break those records Thursday. The heavy gas demand had manypeople pulling gas out of storage to satisfy it, a Midcontinentmarketer said. “That [storage withdrawals] will always raiseprices” when it happens during what is normally an injectionperiod, he noted.

Pacific Gas & Electric threw a curve by many traders when itelected not to continue a high-inventory OFO beyond Friday. Quite afew deals were done on the presumption that the OFO would still bein place Saturday, a marketer said. It’s really a guessing game onwhether the OFO might get re-instituted for Sunday, she said, “butyou can bet everybody concerned will make sure their pagerbatteries are fresh this weekend.”

There was no guesswork about the Southern California border asSoCal Gas declared an Overnominations Day for at least Saturday. APG&E citygate drop of a little over a nickel was quite mild incomparison to the border’s plunge into the high $2.10s. TheCalifornia weakness rippled into the Rockies, where gas thatcouldn’t find its way into the high-priced Midcontinent/Midwestmarkets was subject to OFO-like procedures implemented for theweekend by utilities in Colorado and Wyoming.

Several sources agreed that tentative August cash business cameto a near-standstill as traders gazed in awe as futures againposted a large increase. “Those [screen] rises seem to have taken alot of people’s breath away,” commented a Gulf Coast producer.

Buyers reported getting August offers Friday at $2.23-24 for ElPaso’s San Juan-Blanco pool and at plus 1 basis for the MRTmainline.

Due to its heavy reliance on Canadian gas, California is one ofthe few domestic markets that can stay isolated from large pricemoves at Nymex, a marketer said. Because of that, SouthernCalifornia border basis quotes have collapsed as the screenrocketed higher, he said.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.