For the most part yesterday cash prices carved out increases asTropical Storm Harvey lent some support to the East and maintenanceissues helped strengthen prices along the West Coast and Rockies.Yet mild weather nationwide, the expected American Gas Associationstorage report of higher-than-normal injections and a weak futuresscreen were traders’ main topics of conversation yesterday. And thegeneral consensus is that cash price increases may be hard to comeby for the next few days.

Tropical Storm Harvey continued to show more bark than bite, andone source even labeled the storm a “non-event.” Harvey did worrysome, however, as both Chevron and BP Amoco said they were going toevacuate non-essential personnel yesterday as a precautionarymeasure. Chevron said its production would not be shut in and BPAmoco followed its policy of not disclosing whether it curbsproduction. At the end of the day, Gulf Coast and Texas pricestraded flat to a few cents higher. Transco Station 65 and theHouston Ship Channel each gained a few cents to finish in the high$2.40s and low $2.50s, respectively.

In the Rockies, an outage at an Amoco-operated processing plantcaused above average price strength, one source said, as NorthwestRockies prices gained over a dime to finish in the low $2.30s.Another source said a major factor in the region was a CIG shippersmeeting that caused trading volumes to virtually “dry up.”

One point that surprised many Northeast sources was CNG, whichfinished in the high $2.60s, a few cents higher than Friday’sfinish, and actually reached the low $2.70 level yesterday morning.”I’m not sure why CNG was up higher like that, but there seems tobe quite a few marketers short on that pipe. There is definitelymore market on CNG than at the Northeast citygates, where there ispractically no demand at all.” Hurricane Floyd is gone, but itstill can take credit for the lack of Northeast demand as gascustomers in some parts of New Jersey and North Carolina are stillsoaked or under water from the vast amounts of rain the stormprovided (see related story page 2).

Although temperatures were mild in Chicago, demand held upyesterday. One source was quoting Chicago prices in the low $2.60sand MichCon deals in the mid $2.60s.

The “typical weekend price recovery” in the West was aided bystrong demand for September spot gas at Topock, one source said. OnFriday, prices fell more than 15 cents at the Border and nearly adime at PG&E Citygate thanks to a Saturday OFO called on theSoCalGas system. Yesterday, however, utilities that had gone shortfor the month started to play catch-up. “That is the only thingthat would explain why September prices are trading a nickel ormore premium to October. If they didn’t need the gas in Septemberto make up imbalances, they would just buy the cheaper Octobersupply,” she said.

Looking forward to next week’s bidweek, one Midcontinent sourceis already circling the wagons. “In my opinion, you’ve got to bevery bearish about the upcoming bidweek. I remember last year ataround this time, cash gas prices fell way low in theMidcontinent.” In September of last year, the bidweek price forPanhandle Eastern was $1.56. “It has been a busy hurricane season,but most October storms occur in the Pacific. The weather is mildnow, and our reports say this winter will be mild as well. Thefutures screen is offering no support. With all that in mind, thereis a definite possibility this year could challenge last year’slevels.”

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