It seemed reasonable Thursday to expect that prices would besoftening Friday. Sources ticked off good reasons for thinking so:a low-demand holiday weekend; forecasts of moderating Western heat;and the end of storm-related outages in the Gulf Coast.

So what happened Friday? The few points that fell didn’t losemuch more than a penny or two, and the rest mostly ranged from flatto up a nickel or so. The screen run-up provided an obviousrationale for some of the firmness, although cash didn’t see nearlyas much increase as Nymex.

A marketer attributed the general Gulf Coast flatness to aresidual Hurricane Earl effect. Many traders were already buyingextra gas above their immediate needs either to start payback topipelines for imbalances incurred during the storm outages or toreplace storage withdrawals, she said. In addition, even if it ishighly unlikely to have any potential impact until this week,people were thinking about the tropical wave in the Caribbean.

Most Midcontinent points saw small to middling increases, likelydue to heat waves pervading Oklahoma and Texas. Those price hikescarried over to Midwest citygates. A Midwestern trader felt peopledon’t want to be short on long weekends, afraid something adversemight happen to their supply position. “And I think quite a fewpeople are short,” he added.

Southern California border deals started about a dime lower inthe $2 area, “but then everybody started buying heavily,” amarketer noted. The outburst of demand was enough to pull theborder average back to flat around $2.10. Apparently Californiawasn’t cooling off as much or as quickly as forecasted, he said,because there was still a lot of UEG (utility electric generation)load. Power prices were running around $60/Mwh Friday, down fromearlier in the week but well above the $25-30 they would becommanding under more normal circumstances, the marketer said.

A low-linepack OFO by PG&E contributed to border andcitygate strength, traders said. One thought SoCal Gas had anOvernominations Day in effect, but it wasn’t so, the distributorsaid.

A couple of sources suspected the California utilities mighthave been drafting linepack Wednesday and Thursday, expecting toreplenish with cheap weekend gas, but saw their plans foiled.

A Midcontinent marketer said he sees more upside for futuresthis week, “but I don’t think cash will be able to keep up due tolack of fundamental strength.”

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