Except for a few western points, the September aftermarket gotoff to a generally strong beginning. In swing deals done Thursdayfor the first (and in some cases for flow through Tuesday), mostmarkets registered double-digit increases over last-of-Augustlevels and also were well above September indexes.

Several traders considered storage concerns the chief factor inmaintaining a bullish market outlook. The situation is getting moredire with each passing week, one said. “If we stay on the currentinjection track of 50-55 [Bcf] a week for the next eight to nineweeks, we will be only 77-78% full by the start of the withdrawalseason. I have been a bear for the last 10 years but this [storage]has me bullish. If we get some cold weather in late October, wecould easily see $5.50 or $6.00 [Gulf Coast] prices.”

In addition to record-setting heat continuing in thesouth-central states, cooling demand was rising through theMidcontinent and into the previously balmy Midwest. ComEd, theprimary electric utility for Chicago and northern Illinois, wasprojecting its highest power load of the year – more than 20,000MW. A cold front from Canada was trying to spread into the Midwest,one forecasting service said, but it was tending to weakenThursday. Even the cool cats of the Northeast were getting a bitwarmer, though not by much.

Northern California (Malin and the PG&E citygate) fell offsignificantly from last-of-August pricing, and it was joined by theSouthern California border as the rare points to begin Septemberbelow indexes.

Bidweek drew to a quiet close with little new trading being doneThursday, and for many sources it was none too soon. “I hopeeverybody is prepared for the ‘sticker shock’ of Septemberindexes,” commented a Midcontinent-based marketer. Indeed! GPItoday will report by far the highest overall index levels in itshistory of tracking the modern spot market.

“A lot of people are tired of all this volatility, but I don’tbelieve we’re going to escape it anytime soon,” said a Calgarytrader. “After all, we still haven’t had a decent hurricane in theGulf of Mexico; that is, if you can call a hurricane ‘decent’.”

A Northeast marketer said basis was weaker than last month’s,but still stronger than usual for the September shoulder period.Transco Zone 6 and Texas Eastern M-3 basis was relatively weakcompared to variable transport costs plus fuel, he said, peggingthem at about 35 cents from Texas Eastern’s East Louisiana pool and27 cents from Transco’s Station 65. Prices may be at historic highsright now, he concluded, “but if the forecasters are right and weget a normal winter here in the Northeast, these prices will seemcheap.”

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