Few traders would dispute that Wednesday was a classic day forwanting to buy early and sell late. Sources reported prices risingsteadily during trading at virtually every point, with the highends of ranges occurring late in the morning. Increases of a dimeor more dominated the market, and Northeast citygates were seeingthe high side of $3 again in some deals.

Most traders still don’t expect index levels to be reached againduring September, but it has surprised them to see points such asthe PG&E citygate and some Northeast citygates back to only14-18 cents below index.

A marketer attributed this week’s continued cash strength tostorage demand, saying, “a lot of people have decided they canpound more back into the ground.” He and other traders agreed thatit’s reasonable to expect one more round of firming today beforethe usual weekend slump sets in Friday.

A Northeast buyer reported strong air conditioning demand. It’sonly moderately hot in the region, he said, “but what’s left ofHurricane Dennis is throwing a lot of humidity our way.”

A western marketer said there was some “good heat” in theeast-of-California market, resulting in some electric utilitiesbeing notable buyers Wednesday. However, he was a little surprisedthat West prices were as firm as they were in light of a continuingJackson Prairie storage outage.

People are drafting the PG&E system, a marketer said, andpipes are full coming from the north; thus any additional suppliesto make up the imbalance will have to come from the SouthernCalifornia border. He expects to see an increase in the PG&Ecitygate price today relative to the border.

Some traders felt the AGA storage injection report to be aboutas bearish as last week’s, but one wasn’t so sure. After all,”we’ve still got more [year-on-year] deficit to reduce,” he said.

Floyd is the latest tropical storm formation in the centralAtlantic. One forecasting service expects Floyd to become verystrong but possibly to emulate Dennis in never reaching the Gulf ofMexico. A tropical wave in the southern Gulf bears watching but islikely to hit the Mexican coast.

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