The August aftermarket began Monday with prices down a dime ormore from the last day of July in most cases, except for slightgains at a few western points. In comparison to where they expectedAugust indexes to be, several sources said swing gas for today wasflat in general but slightly lower at some eastern points.

San Juan Basin and the Southern California border were among therare points with initial swing prices flat to a bit above what Julyended with. The reason was rather obvious as California seemedunable to shed a chronic case of power woes, with the Golden Stateitself very hot and high temperatures peaking above 100 degrees inneighboring desert Southwest states, meaning they had little or noexcess electricity to send California’s way.

The California Independent System Operator was up to a Stage OneElectrical Emergency declaration earlier than usual Monday anddidn’t take long to proceed to Stage Two, which asked Pacific Gas& Electric, Southern California Edison and San Diego Gas &Electric to curtail interruptible customers as necessary. Noapparent relief is yet in sight. Not only did the California PowerExchange show eight straight hours Monday of same-day peakingprices at fractions of a cent below the $500/MWh price cap, butday-ahead numbers for today were also hitting $499 plus change overa stretch of several hours.

A marketer with a larger than usual swing volume to report atthe SoCal border said it’s virtually always required to overbuy”because you already know not all of that gas is going to make itinto the state.”

Another marketer said he tried to avoid committing much at theoutset of the aftermarket by indexing many deals, commenting thatwas largely because he knew of several traders who already had madetheir Aug. 1 deals on Friday. “We’re sitting back and waiting forthe early aftermarket to develop a bit further,” he said.

An industrial end-user who buys for plants in the Gulf Coast andMidcontinent explained why he did no fixed-price deals for August:”The market looks pretty weak at this point, and I’m betting onlower swing prices during the month.”

After a long period of the Northeast being unusually cool formid-summer, the region should start experiencing closer to normalheat by Thursday, said an aggregator who trades the region. Heexpects citygates to start rising around Wednesday.

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