Substantial rebounds in cash prices Tuesday surprised many traders, especially because there were no significant changes in overall market fundamentals, and screen support remained minuscule. Triple-digit California gains led a cash market advance that saw most points gaining at least a dime or more, with “or more” being the key operative words. Increases tended to be smallest in the Northeast (Algonquin citygates were flat) and largest in the Rockies/San Juan market.

“It’s just one of those things that are hard to explain,” a marketer said of the price upticks. He noted that Monday afternoon’s moderate futures rise might have boosted cash a little Tuesday, but the screen was only mildly higher and trending lower during Tuesday morning’s cash activity.

With winter-like weather receding from virtually all of the U.S. except a few patches along the Canadian border, it was hard to see where demand could be picking up, the marketer said. Southern states are getting warm enough to see air conditioners being turned on, but that load still wasn’t heavy enough to explain Tuesday’s cash strength, he added. The only rationale he could guess was people expecting a bullish storage withdrawal report today from AGA.

One trader cited continuing high power prices in California (even though Cal-ISO had not repeated a Stage Two Electrical Emergency alert as of press time Tuesday) as part of that state’s gas price spikes. But since there were no low-linepack OFOs by the utilities, “we were asking each other the same question” about why prices skyrocketed, he noted. However, a marketer said most of the spike derived from a May basis blowout of $2 or more at the Southern California border, causing basis quotes to approach quadruple digits. He reported plus $9.75 deals being done in the afternoon, and said plus $10.00 could have been offered later. However, he added, “there’s really not much justification for those [swing] quotes because regional weather is mild.”

Pacific Northwest gains generally were much smaller than those in the Rockies. That was at least partially due to NOVA maintenance that caused no IT nominated at the Alberta/British Columbia border being authorized Tuesday, resulting in a cut of 138.6 MMcf/d. Varying volumes of A/BC restrictions will continue through late this month due to the maintenance, a NOVA spokesman said.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.