Repeat

Wednesday’s cash market was almost a repeat of activity the day before, with flat to mildly higher numbers dominating across the board. Bet on a radical change from that staidness today, though. After AGA announced both a large upward revision of last week’s widely derided 3 Bcf storage injection figure plus a new increase that exceeded nearly all expectations, the screen responded with a dive of more than 30 cents.

Tuesday trading was close to being a repeat of Monday’s in that the overall price gains were mostly on either side of a dime or greater. Flat to lower numbers at the California border-SoCalGas, PG&E citygate and the Pacific Northwest’s Sumas and Stanfield points were the primary exceptions to continued firmness.

This summer, look for the weather to be slightly warmer than the 30-year average but slightly cooler than last summer with fewer “named” storms in the Atlantic Ocean. So says Sempra Energy Trading meteorologist Dan Guertin, who offered up his forecast at the North American Gas Strategies Conference in Houston yesterday.

Several sources had expected cash prices to stay put for themost part Wednesday until the AGA’s storage report was released inthe afternoon, but they were fooled. Instead, buoyed by a firmerscreen during the morning, cash got a head start on the subsequentbig futures run-up by rising about a dime or more at nearly allpoints.

How low can you go? Some traders likely were asking themselvesthat very question Wednesday afternoon after seeing cash pricescrater by about 20 cents or more at nearly all points that morningand then watching the screen go into a swoon immediately after theAGA storage report, which means the cash market is expected toregister big losses again today.

In the immortal words of baseball great Yogi Berra: “It’s déjàvu all over again!” A week after a smaller-than-expected storageinjection sent gas futures soaring by about a quarter, theoccurrence was repeated Wednesday afternoon. And just as thatprompted cash numbers to do their own skyrocket act last Thursday,so did sources predict similar fireworks in this morning’s action.

The rapid transition to a competitive power industry wasresponsible for last summer’s outages and brownouts, and a repeatcould be in store for this year, according to the results of theDepartment of Energy’s (DOE) final report on reliability issues.

Thursday’s trading was almost a repeat of Wednesday as cashquotes for both late August and September deteriorated again.Another big drop on the Nymex screen was too much for the physicalgas market to ignore, and sources continued to report that sellersgreatly outnumbered buyers. In some instances a buyer could almostname his or her September price, one trader said.