Apparently the cash market was just taking a price-consolidationbreather for the weekend because it returned to a steep upwardtrack Monday. Only Florida citygates failed to rise by more than 30cents, and the highly volatile California and Pacific Northwestmarkets led the price charge with gains of 60 cents or more.

It was a combination of current and upcoming cold weather and asharply higher screen providing the momentum for cash advances, amarketer said. “Of course, weather was the primary mover behindfutures,” he added.

“These weather forecasts have a way of tantalizing folks intopaying more for gas,” said a Northeast marketer. A lot of Canadiansupply was staying in the West, he said, “and what’s coming East isvery expensive and hardly worth it.” Either Dawn storage is short”or they need the gas in Alberta,” the marketer surmised. He alsosuspected that high California prices (a few Southern Californiaborder quotes surpassed $7.50) probably kept a substantial amountof Canadian gas in the West that otherwise would have movedeastward.

Really severe weather isn’t due in the Northeast until laterthis week, so the marketer was a bit apprehensive about whereprices might be then. However, he said, fuel oil is finally gettingcompetitive with gas at regional burnertips, so some cogenerationplants switching are switching fuels and helping to keep gas pricesfrom going through the roof.

Despite even colder weather due in the Northeast, a Gulf Coastsource considers the market overheated, and looks for a levelingoff of most prices today.

Supply constraints tended to make western price hikes amongMonday’s largest. One trader estimated about 200 MMcf/d of San JuanBasin gas was shut in due to well freeze-offs, and a Rockiesmarketer reported hearing of freeze-offs in the Opal Hub area. Inaddition, maintenance bottlenecks on Transwestern and El Pasohelped boost California border prices to their market-leadingaverage in the mid $7.30s.

A source reporting $115-150/MWh day-ahead electricity prices atPalo Verde said he heard a coal-fired generation plant had gonedown Monday in the Four Corners area. PNM said its policy precludeddiscussion of its power plants’ status, but any such outage wouldhave been added to four western nuclear plants currently at zerocapacity. However, three of those (Diablo Canyon 1, San Onofre 2and Waterford 3) were at various stages of returning from refuelingdowntime, according to the Nuclear Regulatory Commission.

One marketer said his Malin prices were slightly above hisPG&E citygates. Although in the overall market citygatesaveraged barely a nickel above Malin, that certainly wouldn’t coverthe price of Redwood Path transport, he noted. “Buying citygate andselling at Malin is obviously the best strategy in this situation,”he said.

Northwest kept its OFO in place for the area north of Kemmerer(WY) Station, causing the price gap between Sumas and domestic gasto widen to about a dollar and a quarter.

A Northeast trader said he saw storage injections staying fairlystrong through last Friday, so he anticipates an AGA injectionfigure around 25 Bcf Wednesday. However, that very well could bethe last net injection report of the season, he said, because thisweek’s cold snap is almost certain to result in AGA announcingwithdrawals next week.

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