Again

If you thought a new pooling system on El Paso Natural Gas wouldbe approved in time for summer vacation, it looks like you may haveto sweat it out for another season. After months of hair pullingscrutiny and debate, FERC has decided to reject El Paso’s March 16filing for scheduling gas pooling transactions on its system andconvene yet another technical conference on the complex matter.

After taking Tuesday’s small gain in stride, the bears were atit again yesterday pushing the August contract to test the bottomof a descending channel that has limited movement in the contractsince July 1. However, support held and light buying ensued pushingthe contract up to close at $2.231, down 3.5 cents for the day.

Negotiations reportedly are going on to bring together onceagain the Washington lobbying activities of large oil and naturalgas producers in the form of the American Petroleum Institute (API)and the Natural Gas Supply Assoc. (NGSA).

Funding for the Low Income Home Energy Assistance Program(LIHEAP) is up in the air again with a Senate committeereauthorizing funding through 2004 and a House subcommittee votingto zero out 1999 fiscal year funding for the program. Rallying forLIHEAP’s continuation is the American Gas Association. “Thisunanimous [Senate] committee vote demonstrates the depth of supportthat LIHEAP has in the Senate. In fact, several senators at themarkup expressed their dismay about the House subcommittee actionto eliminate program funding,” said Steve Crout, AGA director ofgovernment relations. “We intend to fight hard to restore the ’99funding for LIHEAP, and today’s action shows that we can count onstrong support from the Senate.”

As if taking a cue from the professional basketball team inChicago, the bulls of natural gas were on top again last week atNymex. A short-covering rally that began Wednesday resumed Fridaysending the July contract to $2.284, a 14-cent increase for theday. Estimated volume was a robust 99,631.

The July futures contract was nudged lower again yesterday butnot before bulls attempted to push the market higher early in thetrading session. July reached a high of $2.03 just before 1:00 P.M.EST. only to be beaten back to settle at $1.938, down 3.8 cents forthe day. By dipping into the low $1.90s the spot contract traded atits lowest point since April 1997.

Nymex futures once again were unable to buck the downtrend andcontinued to slip lower yesterday in quiet trade. The July Nymexcontract opened below $2 before breaking through long-term supportat $1.97 only to claw its way back up near the close. July settledat $1.976, down 5.1 cents for the day. In doing so, July posted thelowest level of any prompt contract since January.

Trading at the New York Mercantile Exchange was once againsubdued on Tuesday, as many traders seemed to stand to thesidelines in anticipation of the release of the AGA storage reportlater this evening. Amid what trading did get accomplished, theJune contract inched 1.5 cents higher to settle the day at $2.149.

The Federal Energy Regulatory Commission’s authority formandatory pipeline bypass of a distribution company is up for grabsagain as a result of an Eleventh Circuit court decision lastThursday in the long-running Arcadian case (Atlanta Gas Light et alv. FERC 92-9121).