Tuesday trading was close to being a repeat of Monday’s in that the overall price gains were mostly on either side of a dime or greater. Flat to lower numbers at the California border-SoCalGas, PG&E citygate and the Pacific Northwest’s Sumas and Stanfield points were the primary exceptions to continued firmness.

Also as on the day before, further screen advances got most of the credit (or blame) for rising cash prices, but sources again said air conditioning demand is rising slowly in the South and added that storage injection purchases are gaining momentum.

As usual, the guessing game about what AGA will report about storage this afternoon was popular. The Lehman Brothers investment firm is predicting 30 Bcf in injections, but a producer, citing a bit of chilly weather lingering in northern market areas last week, reported hearing projections ranging from 5 Bcf in injections to 5 Bcf in withdrawals.

“I’m not sure what’s driving prices higher,” said an eastern utility buyer. However, knowing how low storage levels got in the Consuming Region East during the withdrawal season, he said, it’s highly likely that refill buying is reinforcing the futures boost to cash numbers. A marketer agreed that given the awesomely low levels, filling storage — starting Now — is the name of the game. “They’ve been buying for storage like crazy, the last few days,” he said.

Other traders tended to concur. A Gulf Coast producer said more of his sales Tuesday were for storage injection than to Southern power generators. And a Midcontinent/Midwest marketer quoting Chicago citygates in the mid $5.60s, up about a dime, said it made sense to go ahead and put gas into storage now. There’s a little carrying cost involved, he noted, “but it beats what looks like May price increases.” May basis for Chicago is currently plus 14 cents, which translates to fixed prices around $5.70, only a little higher than Tuesday’s swing numbers, he observed. But based on weather getting more summery and anticipated storage demand, he expects the May screen settlement to be significantly higher. All are feeling the pressure of a finite number of days before Nov. 1 to fill those holes in the ground.

With California border prices into PG&E still rising and those into SoCalGas still falling, the border spread narrowed to less than $2 Tuesday. That was chiefly a function of chillier weather in the northern part of the state as compared to Southern California, a marketer said.

He said border-SoCal basis for May began the day at plus $8.00 but was up to plus $9.00-30 Tuesday afternoon. The rebound came after operators of the Palo Verde nuclear plant announced that a refueling outage of the 1,250 MW #1 unit would extend about 20 days longer than originally anticipated. That not only created a rally in May basis for gas, the marketer said, but will cost the plant’s co-owners big bucks when you consider the unit can generate electricity that is selling for around $300/MWh for $30/MWh or less.

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