The overall weekend market was firmer Friday, ranging frombarely above flat to as much as 20 cents higher with most of thegains concentrated between a dime and 15 cents. San Juan Basin andthe Southern California border were the rare points seeing smalldeclines.

The slight border/San Juan softness likely occurred because formost of Friday it appeared that California had shaken off its powerproblems from earlier in the week. However, that afternoon theCalifornia Independent System Operator (Cal-ISO) issued a Stage OneElectrical Emergency urging consumers to conserve power.”Electricity reserves are in short supply from the PacificNorthwest through the Southwest,” Cal-ISO said in its announcement.”The imported power California normally counts on from itsneighbors is severely limited because high demand is strainingresources within those states.”

The rest of the market’s firming was credited mostly to thescreen since weather fundamentals were little changed. Although theSeptember futures contract eventually settled less then a pennyhigher, for a while during morning trading it was up more than adime and that lent support to cash prices, sources said. However,late retreats were reported at many points as the screen startedfalling back from its peak. Sumas was an exception, a marketersaid, as it went up slightly as several traders found themselvesshort near deadline and started making new purchases.

August bidweek numbers were trending a bit higher due to screenfirmness both Thursday and Friday morning, according to one source.But a Houston-based marketer characterized Friday’s market as”stealth trading.” Absolutely no utilities were showing any bidsfor Aug. 1 in order to keep downward pressure on prices, andapparently it worked with the screen eventually falling back toessentially flat, he said.

The set-up for August’s market is very unusual, the Houstontrader continued. “For July utilities for the most part said we’rebuying swing only, and that paid off in spades” because of how faraftermarket prices dropped below July indexes, he said. “So they’regoing to try it again for August.” Somewhat ironically, though,producers also were reluctant to tie in much baseload market butfor a different reason, the marketer said. “Their rationale is thatAugust normally is the hottest month of the year, and we’rebecoming overdue for a Gulf of Mexico hurricane.”

In its first two months, hurricane season 2000 has been ano-show in the Atlantic and Caribbean largely due to cold surfacewater temperatures in the eastern Atlantic. However, conditions forstorm development were improving last week as the ocean startedwarming up, and a tropical wave west of the Cape Verde Islands borewatching, according to one forecasting service.

Utilities at opposite ends of the U.S. had similar reasons fordoing only index deals for August. A large East Coast buyer said hewas instructed to trade only on index because of recent pricevolatility. And a staffer at a municipal LDC in the West commented,”I’m not sure if we’re ever going to trade at fixed prices again.Our budget is too limited for much risk in a volatile market.”

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