The bullish sentiment for the aftermarket that several tradershad expressed Tuesday (see Daily GPI, July 1) appeared to bejustified Wednesday as price increases of a dime or more dominatedmost points. The old refrain of “following the screen” was popularagain. But as the screen leads up, so shall it also lead back down,according to some prophecies, and so it was Wednesday. Early pricelevels were retreating late as Henry Hub futures gave up earlygains. Henry Hub cash started at $2.48-49 but fell as low as $2.40late, a marketer said.

One trader noted Waha in an unusually tight basis relationshipto Henry Hub, trading only 2-3 cents lower. He attributed the Wahastrength to continuing high cooling load in Oklahoma and Texas.

The Southern California border got an assist into the mid tohigh $2.30s at first as traders heard rumors that El Paso wouldissue a low-linepack OFO. But prices sank to the low $2.30s afterthe order failed to materialize. In addition, SoCal Gas wasn’tbuying “and that tends to scare some suppliers,” a marketer said.

Despite the Canada Day holiday, a U.S. source said he was ableto find “a few” people in their Calgary offices and picked up someintra-Alberta supply at C$1.98, flat from swing done the day beforebut almost a dime over index.

Many sources shared the perception that prices will be softertoday, befitting the July Fourth weekend’s reputation as the year’slowest-demand period. But then “watch out Monday” for a bigrebound, as one put it. However, a Gulf Coast trader offered thisthought: as prevalent as that sentiment is (“and I think it’svirtually across the board”), some people are figuring they mightas well go long on supply Thursday and get ahead of the game, thenreap the benefits from the antipated price surge next week.

Saying “market was hard to come by [Wednesday] morning,” amarketer was already putting the above strategy into effect. Shereported buying some Michigan Consolidated citygate gas “with nointention of being unable to unload it” for today’s flow. Instead,she had a storage option for the holiday weekend, “so I rolled thedice hoping for higher prices next week.” However, looking purelyat fundamentals, the marketer said, Chicago has a better chance ofrealizing significant gains from first-of-month levels than doesMichigan (both had nearly identical indexes: Chicago at $2.43,MichCon at $2.42). She explained her belief by saying strongelectric generation loads should help to keep prices strong inChicago, but an overabundance of storage in Michigan could limitprices there.

The AGA report of 72 Bcf in storage injections last week wasneutral, “right about where people expected,” according to onesource. But a Midcontinent marketer begged to differ, saying heconsidered the figure on the bearish side. Last week was whenrecord heat levels and hourly electric prices were being recordedin the Midwest, yet injections were still substantial, he said.That means the heat, which is closer to normal summer levels now,wasn’t having that much effect on current-burn gas loads, heconcluded.

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