Southern California border quotes for swing gas peaked just shyof $7 Monday amid rising prices throughout the general market.Increases at non-border points ranged from about a nickel to 20cents, with most in the vicinity of a dime; however, the PG&Ecitygate went up a little more than 40 cents to around $5.90.

A moderately firmer screen along with slightly warmer weather inthe Midwest and Northeast than those regions had been experiencingrecently were credited with boosting eastern prices. Crude oilfutures for September were very strong, rising nearly a dollar to$32.87/bbl. Of minor significance at this point was a disturbanceoff the east coast of Florida that showed little sign ofdevelopment.

A Northeast-oriented trader said he’s pretty much given up ontrying to work that market for the time being. “Just fuel costsalone from the Gulf Coast to the Northeast have gotten to about 40cents because of high commodity prices,” he said. “It doesn’t makesense to activate your transportation when you can’t cover thevariable cost of moving gas.”

Although no power alerts had been issued in California by pressdeadline Monday, high temperatures there and in east-of-Californiamarkets along with the continuing shortfall in deliveries from ElPaso’s South Mainline appeared to be causing something of a mildpanic in both the swing and September markets. Not only didlate-August border prices nearly reach $7, but September basisquotes that kept rising to plus 240-250 Monday indicated fixedprices at more than $7. Although fixed-price reports remained rare,one marketer said he was doing a few border deals on either side of$7.20.

However, another trader expressed concern that “we’re going tobid the California market super-high, then have El Paso restore itscapacity during September and cause prices to come crashing downaround us.”

Two sources reported difficulty in getting a handle on nextmonth’s Northern California market. “I’m hearing a ridiculous Malinbid-ask range of $5.60-6.00,” said a marketer. She quoted Malinbasis at plus 80-100 early Monday afternoon, but another tradersaid a couple of hours later it was up to plus 100-120. He reporteda San Juan-Blanco fixed-price deal at $3.50 and said the Bajaspread (SoCal border to PG&E citygate) was anywhere from 50cents to a dollar below the border.

A producer was trading Gulf Coast basis (all minus) at 9.5 forTexas Eastern-West Louisiana, 8 for Texas Eastern-East Louisiana, 1for Henry Hub and Transco Station 65 and 3.5 for TGT Zone SL.

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