Cash prices rode a soaring October futures contract,stilll-strong power generation demand and the remote threat ofTropical Storm Floyd to higher levels again Thursday. Gains wereslowing down from Wednesday’s pace but ranged from 2-3 cents at afew points to about a dime at many of them.

Despite a cool front moving eastward and southward through theeastern third of the U.S. that was expected to sharply reducecooling load by today, traders continued to report significantdemand from electric utilities. Even though a Texas trader saw theutilities out buying late Thursday, he said he had no trouble atall filling their orders due to ample supply.

However, about 130 MMcf/d has been taken off the South Texasmarket through the middle of next week due to a MOPS leak (seeTransportation Notes). A marketer who buys only small quantitiesoff MOPS said he merely switched sources to the Magnet Withersreceipt point in Florida Gas Transmission’s Zone 1. Magnet Withersquickly became a popular point for traders who normally take MOPSgas into FGT, he said.

Floyd was generating enough “storm hype” to help boost gasprices, sources said. It was expected to reach hurricane status asearly as Thursday night and caused tropical storm watches to beissued for parts of the Leeward Islands in the extreme easternCaribbean Sea.

On Wednesday there seemed to be a near-consensus among sourcesthat the eastern cool front and the normal slump in weekend demandwould have prices dropping today, but some naysaying started toemerge Thursday. Although Floyd is still a long way from the Gulfof Mexico, “there’s always that thought [of potential supplydisruption] in the back of people’s minds,” a producer observed.Nobody wants to be caught short over a weekend with a storm around,he added. A Gulf Coast marketer said he had seen Henry Hub tradeelectronically for the weekend twice at $2.81 Thursday afternoon,2-3 cents above his high $2.70s deals that morning for today’sflow. He also pointed out that much of the screen’s skyrocket actoccurred after Thursday’s cash trading was completed, leaving someresidual support for today.

But a western trader was still mildly bearish. Noting thatPG&E didn’t issue an OFO Thursday but still was projectingabove-target linepack for today, he said it would be “quitereasonable” to expect double weekend OFOs from both PG&E andSoCal Gas.

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