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June Market Closes On Much Lower Price Notes
Cash quotes for the last day of June tumbled Thursday,influenced by futures weakness in the morning and from the previousday and also by a general dearth of weather-related demand outsidethe West.
Declines ranged from about a dime to a little more than 30cents. There was little geographic pattern as varying price dropswere dispersed throughout all regions.
With a wide band of rain starting to cool off the Southeast, andthe major Midwest and Northeast market areas enjoying a period ofrelatively mild temperatures, utility load was slipping fast,traders said. The weather factor is expected to remain unchangeduntil a warm-up begins early next week.
Meanwhile, the West Coast remained beset by a multi-day heatwave, but western gas prices still fell along with the overallmarket. The California Independent System Operator issued itsfourth consecutive Power Watch and Stage One Electric Emergencyalerts Thursday, saying heat throughout much of the West limitedCalifornia’s ability to import electricity from other states.However, some relief was expected to begin today.
NGI erred in Thursday’s issue by saying Cal-ISO had not gonebeyond a Stage One notice the day before. The ISO did declare aStage Two emergency Wednesday afternoon, but the announcement wasnot posted until after normal business hours (and press deadlines)in the Central and Eastern time zones.
July prices generally were moving lower Thursday but saw amoderate rebound toward the afternoon when the screen, afterinitially “tanking hard” in one source’s description, struggledback up into positive territory. “I sure was amazed that futureseventually managed a small gain after getting as low as $4.22,” aproducer exclaimed.
While August futures dipped briefly into the $4.20s Thursday,”no one showed a bid at the Chicago citygate during that periodbecause they assumed, incorrectly, that the market was coming theirway,” a marketer said.
A couple of traders agreed that baseload deals seemed muchharder to obtain than in most previous bidweeks. That wasespecially so at the Southern California border, one said.
Utilities will have their work cut out for them today when theygo to nominate over the five days of the holiday weekend, aHouston-based trader said. While Saturday and Sunday weather willbe relatively mild across much of the East, theMonday-through-Wednesday period is expected to see the arrival of a”mini” heat wave, he explained. If they haven’t scheduled enoughsupply for the second half of the long weekend, “they will bescrambling for gas Monday, Tuesday and Wednesday when the majorityof us are just getting back into the office,” the trader said. Inthe meantime, though, he concluded, weak demand associated with theholiday should keep a lid on prices for the initial Julyaftermarket.
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