It seems like a safe bet that early this week nobody could havepredicted big price increases anytime in the near future. Themarket’s bearish feeling at the time was palpable. But in somethingclose to a mirror image reversal of Tuesday’s big declines, tradersused an awesome display of might by futures to send cash priceshigher by a dime or more across the board Wednesday.

Cash sources said they had no idea what was driving the Nymexscreen to a quarter-plus gain (one claimed he was “reasonably sure”that the New York City water supply hadn’t been spiked).Fundamental influences (weather, tropical storms, storagesituation, supply constraints) have remained generally negative forsome time now, they said.

Despite Henry Hub cash numbers gaining more than 15 cents inhighly volatile trading, the gap between the Hub and Octoberfutures widened to more than 20 cents. A marketer attributed someof the Hub’s firmness to the end of a three-day maintenance outageof Koch Gateway’s big Bistineau, LA, storage facility. Theresumption of injection capability there is soaking up aconsiderable amount of supplies, he said. The Bistineau outage”shows how delicate the balance is in a shoulder period.” While thefacility was down, Henry Hub gas lost much of its flexibility tomove to variable points, the marketer added.

CNG widened its Appalachian premium over Columbia (TCO) to morethan 15 cents and maintained a slight lead over most Northeastcitygates. Just about all of CNG’s receipt points are underconstraint, an aggregator explained, and that enhances the value ofgas that is able to move on the pipe. It’s much like last year, hewent on, when TCO was taking hardly any gas at interconnects andAppalachian pool prices jumped.

PG&E expected to begin startup of the Diablo Canyon nuclearplant’s Unit 2, which a lightning strike had tripped off Wednesdaymorning (see Daily GPI, Sept. 23) byThursday evening, with power flowing to the grid this morning and fulloperation resuming over the weekend. Unit 2 is running slightly belowfull power, PG&E said Thursday, in preparation for a 30-dayrefueling and maintenance outage due to begin Saturday. Each unit iscapable of generating 1,100 MW.

A producer evaluating possible winter term deals saidNovember-March basis for Chicago had been plus 14 Wednesday butstrengthened to plus 16.

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