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Fundamentals, Screen Keep Cash Quotes Rising

Fundamentals, Screen Keep Cash Quotes Rising

Cash prices built further Tuesday on their early-week gains in virtually every market except Northern California. Factors behind the firmness remained much the same as on Monday: a moderate screen increase, a "stash it while you can" storage mentality and a gradual warming trend in northern market areas. Price movement ranged from flat on several Rockies pipes to about a nickel higher at many Gulf Coast and Midcontinent points.

"It's getting hot again," observed a Midcontinent marketer reporting heavy power generation load on the Williams system.

A Gulf Coast source was in agreement, adding that recent nuclear plant outages in Louisiana and Texas have been worth almost 800 MMcf/d in regional gas load. Quite a few utilities are behind on their storage injection schedules and are using the relative lull from last month's intense heat waves in an attempt to catch up, he said. For that reason, besides keeping demand for swing gas high, the utilities are keeping their takes of indexed baseload gas at maximum levels, he added.

Heavy air conditioning load in Texas had Waha trading just 2-3 cents below Katy, while Houston Ship Channel deliveries commanded a premium of almost a nickel above Henry Hub. Most Waha gas was going to either the Midcontinent or North Texas area because the transport economics to Katy didn't work, a marketer said.

One Southeast trader sees little chance for prices to get much higher than they are now. "As far as real demand goes, there is no doubt in my mind that last week turned out better than this week will," he said. "There aren't as many end-users buying gas as there were a week ago. I'd say the ratio is 3:1 sellers to buyers."

Malin and the PG&E citygate were Tuesday's rare weaker points. There's just not as much cooling load in Northern California as there is to the south, said a marketer who pointed out that his purchases into the PG&E system at the Southern California border had widened to nearly a dime under SoCalGas deliveries.

Intra-Alberta quotes barely managed to creep any higher due to a lightning strike at PG&E Gas Transmission-Northwest's Station 13 (see Transportation Notes) preventing any Kingsgate volume increases, which caused gas to back up at the A/BC (Alberta/British Columbia) border, said a Calgary source. However, the situation was starting to ease Tuesday afternoon, he said.

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