A modest nudge from the futures screen and a warming trend inmajor market areas that had been unseasonably cool in recent dayswere enough to generate an overall upturn in cash prices Tuesday.The increases ranged from negligible to just over a dime in somecases.

Gains were mixed within market regions but tended to be greaterin the Gulf Coast and Midcontinent and smaller in the Rockies andCalifornia. One source said pipeline maintenance that would take abig chunk out of Kingsgate capacity starting today pushed Malinquotes up into the mid $2.10s early on, but they were falling backto around $2.10 in late deals.

Producers are liking what they are seeing in the Californiamarket right now, a marketer said. Hot temperatures (“when youseeSan Francisco higher than 80 degrees, you know they’re reallycooking,” said another source) are boosting cogeneration load,which the marketer estimated at 40% of in-state demand. Supplierslook for prices to remain strong, he added, because the strong ElNino weather pattern over the last year has pushed the foodprocessing season-a big gas-using activity-back at least a month.”Typically they start processing in July, but this year the cropsare behind and will not be ready until late in August or September.This will force the food processors out into the gas market then.”

Sources were trying to assess what market impact themonth-or-more delay of Northern Border’s in-service date for itsChicago Project expansion (see Daily GPI, Aug. 4) would have; onecalled it “the million-dollar question.” Calgary traders returningfrom Monday’s Heritage Day holiday didn’t seem too concerned abouthaving the anticipated extra access to the Midwestern market putoff for a while longer, a marketer said.

However, although intra-Alberta prices for today’s flow wererising into the upper C$1.80s, winter-month numbers were comingdown. A source who had seen intra-Alberta trading for the winterperiod in the mid C$2.80s as of late Friday said the price area wasdown about C15 cents to C$2.69-70 Tuesday. Another trader saidprices for all the forward months, including September andNovember, were drifting downward.

A Calgary marketer said winter intra-Alberta prices were”getting a bit overdone” before news of the postponement hit, andhe sees the retreat as a case of things falling back in line.

Conversely, Chicago basis for November-and in some case theNovember-March period-was strengthening on the delay news, a coupleof sources said. But one Chicago trader offered this grain of saltwith that opinion: winter basis had already been moving up fromplus 17 to about plus 26 while Northern Border’s expansion wasstill targeted for Nov. 1, “so it’s not like the delay caused anovernight run-up.”

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