It sure didn’t take long for the August aftermarket to jump wellabove indexes, one market observer said. Boosted by screen strengthand the anticipation of closer to normal summer weather eventuallyinvading key northern market areas, all points except Malinregistered double-digit gains Wednesday.

“Double-digit gains” is almost an understatement of Wednesday’sfirmness. A majority of advances exceeded 20 cents, and severalwere 30 cents or more. And the climb hasn’t stopped yet, sourcessaid. Much of the higher pricing was predicated on the previousday’s futures rise of more than 20 cents. With the screen onlymildly firmer during Wednesday morning’s cash trading and waitinguntil after AGA’s afternoon storage report to post another spike of20-plus cents, look for more big gains today, the sources said.

AGA said 63 Bcf was injected into storage last week, a figurethat met most expectations but triggered a highly bullish futuresreaction. Once again the bulk of the refill occurred in theConsuming Region East. It wasn’t surprising to see a smallwithdrawal volume in the Consuming Region West, which has beenbattling severe heat problems since mid-July.

“I can’t figure out the Nymex psyche in reacting to storagereports, but as a producer I really can’t complain much,” said aHouston-based source. “It’s just too bad they [futures traders]didn’t get quite as excited a week ago. It might have helped keepAugust indexes from falling so far.”

But “fooey” was a sanitized description of how an East Coastutility buyer felt about Wednesday’s spikes. “I’d be lookingforward to more normal weather if I could get ‘more normal’ gasprices,” he said. “The storage report is so arbitrary; there isn’tfull participation [in AGA’s survey], so you’re actually gettingkind of a ‘pretend’ number. But I’m forced to live with the Nymexreaction anyway.”

Northeast citygates in the $4.30s were more than 20 cents aboveindexes. Chicago deliveries in the mid $4.10s represented anincrease of about a quarter from the August index of $3.90.

“The play that the market is watching right now is called’Waiting for Alberto,'” joked a Gulf Coast producer, referring tothe name that will be given to the Atlantic Basin’s first tropicalstorm of 2000. He and a marketer agreed that the stir causedTuesday by word of a potential tropical depression off Mexico’sYucatan Peninsula proved to be much more hype than it wassubstantive.

California maintained a perfect batting average on the week inreaching a Stage Two Electrical Emergency declaration by the state’sIndependent System Operator for the third day in a row. There’s goodreason to suspect the streak will remain unbroken today, as bothsame-day and day-ahead prices posted Wednesday by the California PowerExchange were peaking at fractions of a penny below $500/MWh. It willbe “interesting” to see what happens if the state’s heat wave problemscontinue into next week, said one observer, since the Cal-ISO boardvoted earlier this week to lower the price cap further to $250/MWheffective next Monday (see Daily GPI, Aug. 2).

California’s new power price cap won’t have one iota of effecton the gas market, according to a Midcontinent-based trader. “Wedon’t have any generation there ourselves but sell to the folks whodo, and a $250 cap still allows plenty of room for making money ondelivering gas at the state border,” he said. What the cap will doto the power market is another story, of course, he added.

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