Cash was king for most of the month of June; oftentimes tradingat a premium to the Nymex futures contract. But that seems like adistant memory as cash prices shrugged off some of the season’shottest temperatures to slip, for the second day in a row, by up to5 cents almost across the board. While some traders expressedsurprise at the weakness, others said this is a sign the Nymexscreen is regaining control of market direction.

With the exception of additional price gains in the Rockies,California and the Pacific Northwest, most traders reported dealsthat were done below first of the month index despite above normaltemperatures covering most of the North American map. Cash pricesin the South lost between 2-5 cents at all delivery points. “It’shot as hell down here but prices are still pointing down,” said aGulf Coast marketer. “It seems that the screen is taking over,” headded, citing the 6-cent drop on the Nymex spot month futurescontract at the end of Monday’s session. “If we get the screen backup to $2.30, I think it will pull cash back up a little bit.”

Cash prices in the Rockies and the Pacific Northwest continuedupward amidst vibrant demand. This demand is due largely to currentand forecast high temperatures. The National Weather Service six toten day outlook for Sunday, July 19 calls for much above-normalmean temperatures for eastern Washington, the eastern half ofOregon, Western and central portions of Idaho, western Nevada andextreme eastern parts of northern California.

Furthermore, one Rockies trader said that since many players whowent into the month short realize prices aren’t going to get anylower, they are now having to “bite the bullet” and buy at currentprices to meet storage requirements. Northwest domestic gas wasreported as high as $1.87. “There are just more buyers out herethan there are sellers,” the trader said.

San Juan Blanco prices gained about another dime Tuesday asscheduled work on the El Paso system continues. Basin capacity wascut by 450-500 MMcf Tuesday and is expected to be curtailed by only330 MMcf today. Blanco gas was traded as high as $2.06/MMBtu.

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