Eastern prices ranged from flat to down as much as a quarter Monday, with most points registering declines between a nickel and about 15 cents. But western markets tended to rebound strongly as hot weather and higher power prices gave a boost to gas.

Demand from the Northeast got choked off by a cold front in the region, and the effect was being felt in the Gulf Coast, said a Houston-based trader. Transco Zone 6-NYC saw the day’s biggest loss of about a quarter. The trader said a shrinkage of demand related to anticipation of the midweek Fourth of July holiday was already being felt in Monday’s market activity.

A producer quoting South Texas numbers in the low $2.80s said he is not seeing the air conditioning load in intrastate Texas markets that normal summer weather would be producing. It’s still cooler than normal, he said. “In early spring the buzz was about how storage buyers and power generators would be fighting tooth and nail over gas supplies by this time, but it just hasn’t happened.”

A cold front in the Midwest helped to deflate Midcontinent demand, said another producer, but prices that had started in the low $2.70s eventually got to the high $2.80s as several buyers turned up short in late trading. “A lot of people were calling me late to ask for gas,” she said.

Monday’s major upticks were recorded in California and the Rockies as a western heat wave had many inland markets hitting triple-digit temperatures that were expected to continue through the week. A marketer said he heard Nevada Power had a couple of coal-fired generating plants down and that higher power prices were bringing extra peaking gas units online in California.

California peak power demand cracked the 40,000-MW level for the first time this summer, and after a month’s hiatus Stage One and Two power alerts returned as the state transmission grid operator, Cal-ISO, found reserves dipping below 5%. Statewide conservation efforts that had helped keep the peaks under the 40,000 MW level last month apparently weren’t enough on the first working day in July. Cal-ISO declare a first stage alert at 1:35 p.m. PDT, and in a little over an hour later had to declare a Stage Two. The demand was about 2,000 MW higher than anticipated earlier in the day, a Cal-ISO announcement said. A combination of the regional spread of heat and 1,500 MW of imported power that tripped off line over the weekend caused reserves to shrink, although a relatively small amount of in-state capacity, 4,200 MW, was off for planned and unplanned maintenance, with more than 3,000 MW being of the latter category. The Cal-ISO was predicting slightly less of a peak, 39,200 MW today, the day before the mid-week July 4 holiday.

Rockies producers could take some encouragement from the Williams announcement that its deployment of emergency expansion facilities on the Kern River system had been completed Sunday, more than three weeks ahead of schedule (see related story). The expansion adds 135,000 Dth/d of firm capacity to California, raising Kern River volumes by about 19%. In tandem with the SoCalGas sale of supplies from its non-operating Montebello storage field, the Kern River development is expected to put downward pressure on California prices.

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