The Western Natural Gas Futures contract on the Kansas CityBoard of Trade has continued its rapid expansion, with openinterest surpassing 9,000 contracts for the first time everTuesday. KCBT said long-time participants have been “putting onincreasingly large positions” and “a number of new participantsalso have entered the market.” A floor trader mentioned PG&Eand Southern Energy Marketing as being two big players. KN Energy,Oneok and Duke alsowere reported as recent big entrants.

“We’ve had a few new faces that have been a bit more aggressivethan what we had around here in the past,” said one floor traderwho requested he remain anonymous. “There’s been quite a differenceof opinion on how the [KCBT-Nymex] spread is going to react becauseof the El Nino year we’ve been having. Some new traders have comein with a difference of opinion and have tightened up the bid andoffer and we’ve been able to get a lot of stuff off.”

Open interest, which is the number of open futures positions,also has been boosted by “strip contract trading,” in whichsimultaneous purchases or sales of equal numbers of contracts aremade in each of two or more contract months. Strip contracts wereintroduced earlier this year. “Previous to the last few months, thebulk of our open interest was in the first two months. Now we’vegot fairly active open interest from April of 1998 all the way upto March of 1999. That goes hand in hand with the strips that havebeen traded.

“Another thing that should be noted is physical deliveries havebeen fairly high,” the floor trader noted. “We had about 733deliveries for March. It shows there’s a large commercial presencehere.”

KCBT gas futures were launched in August 1995. The contract hasa delivery point of PG&E Transmission Texas’ Permian-Waha Hubin West Texas.

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press,Inc.