The futures screen may have been active Thursday but it waspretty quiet in the incremental cash market, a Houston trader said.Most points were flat to a bit softer, with the biggest drops ofabout a nickel or more occurring in the markets that had alreadybeen weak in the previous couple of days: the Rockies andCalifornia. Northeast citygates in Transco’s Zone 6 managed to ekeout small gains.

Chicago and Michigan citygates fell 2-4 cents despite heat andhumidity in the Midwest that had Detroit Edison reporting it hadset all-time records for electric demand in three consecutive hoursWednesday. And Commonwealth Edison, the Chicago-area power utility,said Thursday it was breaking demand records for the month of Juneand appealed to residential customers to cut back on their energyuse. ComEd said it was operating eight nuclear and 22 fossil-fuelgenerating units Thursday, but violent weather in the upper Midwestand Ohio had damaged transmission lines and tripped off somegenerating units in those areas, straining the entire Midwest’spower supply. Further complicating the situation was a power brokerin the region that had reneged on its options Wednesday and “wentbelly-up,” as one source told Daily GPI. He said he had heard thereverberations from that action were so great that truly desperatepower buyers were paying the unheard-of sums of $4600-4800/Mwh inone of the Midwest electric grids Thursday. Another source said heheard of power prices going as high as $10,000 but blamed it moreon the disruptions in the transmission system.

Although it’s very far from being a threat to the Gulf of Mexicoproduction area, there is an area of “organized thunderstorms” inthe lower Gulf that could develop into a tropical depression, aweather forecasting service said Thursday.

A Western trader noted it was unusual to see Permian Basin gastrading at a premium to the Southern California border. San Juanand border prices were going down because they’re dependent on aweak California market, he said, but the Permian was stayingrelatively strong because of Texas and Midcontinent air condtioningload.

Basis “is blowing out in the West” and prices there remain weakrelative to the screen and the rest of the country, a marketersaid. As long as the California utilities aren’t buying gas, “whichthey really haven’t been to the extent they usually do at this timeof year,” Western basis will just keep widening until the regiongets significant cooling load, he said.

A Houston trader said he hadn’t done any fixed-price businessfor July, adding he was “having difficulty trying to figure out theJuly market volatility.” A producer agreed that a lot of peoplewere holding off on baseload deals, waiting “to see where thismarket is going to go.” However, he said his company was alreadypretty much done for July Thursday, although most of its tradingwas either basis or indexed.

A marketer reported July baseload deals being done in the mid tohigh $2.10s for Permian Basin, high $1.80s to mid $1.90s for SanJuan Basin and mid to low $1.60s for Rockies pipes. Another traderquoted Sumas at $1.45-47. But economics currently are better forhim to keep more of his gas back at Westcoast Station 2, which istrading approximately at intra-Alberta levels, the trader said. Theweak Rockies market means people don’t want to pay up at Sumas, headded.

New basis talk included Columbia Gulf-onshore at minus 2.5;Texas Eastern’s East LA pool at minus 5.25 and West LA pool atminus 6.5; Transco Station 65 at plus 0.75; and TGT Zone SL atminus 1.5.

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press,Inc.