High heat levels were returning Monday in some areas that had enjoyed some weekend relief, such as the Northeast, and never really left other areas, such as the South. The resultant power generation load was being felt in rising gas prices at nearly every point. Except for flat to slightly higher numbers for some Rockies pipes, Niagara, and ANR ML7, price increases elsewhere ranged from about a nickel to more than 40 cents at Transco Zone 6-New York City pool. Most were in the vicinity of a dime.

Natural gas futures waffled on either side of flat and were at a discount to Henry Hub cash numbers all morning, providing little input for cash traders. The traders may have paid some attention to what was going on in the heating oil and crude oil pits, however. Both commodities plunged on news that Venezuela is expected to exceed the oil export quota set for it by OPEC.

Northeast citygates in general tended to see the day’s biggest gains, as the region’s electric utilities braced for a struggle to keep air conditioners going (see story in Power Market Today). That was reflected in sharply higher power prices for Tuesday flow at the PJM-West and Nepool (New England) trading points.

A Northeast source reported making most of his Zone 6-NYC purchases early on either side of $3.60, but had to pony up in the mid $4.20s for a late package as he and other buyers got caught in a short squeeze. Texas Eastern M-3 and Iroquois Zone 2 also were making late jumps, he added, although their upticks were considerably more modest. Zone 6-NYC, which was unchanged Friday while M-3 and the non-NYC pool of Zone 6 rose to near-parity with NYC numbers in the mid $3.20s that day, opened up a premium of about 30 cents over the other two points Monday.

Power generation load is strong through Tuesday, said the fuel buyer for a Northeast utility. However, it probably will be off for Wednesday due to the anticipated arrival of a cold front from Canada late Tuesday.

One Gulf Coast trader said he was still getting a discount on Transco Station 30 prices due to the constraint from construction at Station 35 (see Daily GPI, July 22 ), although the point was stronger in relationship to other South Texas pipes Monday than it had been Friday. That discount may turn into a modest premium again towards the end of next week; a Transco spokeswoman said Monday the Station 35 work is expected to be completed by then. The project originally was anticipated for completion at the beginning of July but was delayed, she said.

One Midwest buyer cheerfully grumbled, “We didn’t get those cooling rains we were promised by the weather forecasters.” Quoting Chicago citygates in the mid to high $2.90s, she noted that transportation spreads were very tight as trading began, around a dime or less from the Midcontinent production area to the Chicago citygate. But the citygate was rising in late deals “while field numbers weren’t following along,” putting more cushion in the spreads, she said.

Hot weather was about the only feature in otherwise quiet western markets, which tended to see most of Monday’s smallest gains, a marketer said. Exceptions were double-digit upticks for San Juan-Blanco and the Southern California border.

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