Although the Northeast power grid remained under heavy stressTuesday from an intense heat wave, hourly spot prices for electricitywere backing off from the peaks of $6,000/MWh hit Monday afternoon inthe ISO New England service area (see related story in this issue). Although gasprices continued to advance Tuesday, a large aggregator felt confidentin predicting they will be following power quotes lower today.

Cash gas was up a dime or more at virtually all points in theGulf Coast, Midcontinent/Midwest, Appalachian and Southwest, butgains were generally less than a dime in the Rockies andCalifornia, where weather was considerably milder than to the east.And Northeast citygates, in anticipation of a cooling-off periodsetting in today, ranged from flat to about a nickel higher.

Some of the relative strength in Gulf Coast and Appalachianprices derived from the East Coast’s air conditioning load, sourcessaid, but it also was based on the rise of more than 14 cents inthe June futures contract the day before.

“We should see gas prices easing off [today] because it’ssupposed to get cooler, and the screen has fallen back a littlethis [Tuesday] afternoon,” according to a Northeast trader. Futureswill pretty much control cash prices for the next few days untilthe next heat wave comes along, he added.

A Midcontinent-based marketer, far from the hubbub about heatand power prices in the East, commented, “I don’t know what tothink of this market. I didn’t know what to think at $2.80 [futuresscreen], or at $3.00, and I don’t know what to think at $3.20. Iguess it’s all that weather in the Northeast, but we’ve got nothingpushing that hard here. It was 83 [degrees] Monday, and it’s 75today [Tuesday]. The demand for power is in the East, which pushesit up here, which in turn pushes up prices for gas.”

One Northeast trader reported being able to find some profits”by buying [Transco Zone 6] non-New York City and selling [Zone 6]NYC.” The two points were running more than 20 cents apart Tuesday.

“Naturally we got contacted to help with emergency power needs”in the Northeast, said a staffer at a large energy trading firm.Then he added jokingly, “At $6,000, we’re glad to do all we can tohelp.”

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