So far cash prices are following the script surrounding theFourth of July holiday weekend. As virtually every trader hadexpected, the market fell hard Thursday. “There were just no buyersout there,” complained one marketer. It was a fairly quiet daysince some gas had already been committed for the weekend onWednesday or earlier, and many people were anxious to get it doneand clear out early for the holiday, said another source.

Most of the declines were on either side of a dime in the East,but once again a still-cool West Coast resulted in considerablygreater weakness at several Western points. The California markettook the biggest hits with plunges of more than 20 cents at thePG&E citygate and Southern California border. And althougheast-of-California markets remained very hot, they weren’t hotenough to keep San Juan prices from sliding almost 20 cents.

The July PG&E citygate index of $2.32 was a dime above theSouthern California border’s, but on Thursday the border wascommanding a slight premium to the citygate. In low-demand periods(“and what could be lower than the Fourth of July weekend?”), thereare more buyers willing to take gas into the SoCal Gas system thaninto PG&E, a marketer told Daily GPI. He saw comparatively moreresidential load and more storage availability on SoCal as thereason for the temporary basis aberration.

A source who traded several Louisiana pipes in the low $2.30ssaw a bearish storage report and the typical low demand for aholiday weekend as the main reasons for Thursday’s big drops. Butanother factor was relative illiquidity from the weekend deals thathad been consummated earlier in the week, she said.

A marketer saw Michigan citygate deals about 3 cents under thosefor Chicago after their July indexes had wound up in a dead heat.Michigan is a storage market and Chicago is a demand market, hesaid, so Michigan prices are less volatile. Michigan basis for therest of the summer got a couple of pennies softer Thursday, hesaid.

The question now is, will the cash market stay in charactertoday as projected by sources or ad-lib some new lines? Just aseverybody and his/her brother and sister called Thursday’ssoftening, they also look for a strong rebound this week. “Today[Thursday] was the last chance for buyers to drop-kick suppliers”before having to pay up again, said a Houston trader. Another inthe Midcontinent noted, “We should have some weather again” thisweek.

But a marketer offered a cautionary note. “Everybody I talk tothinks this thing has some upside potential, and frankly thatscares me. Whenever everyone starts predicting the market will movein a particular direction, it does an about-face and heads in theother.”

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