Anticipation

With traders unwilling to bet too heavily ahead of the release of fresh inventory data Thursday, the natural gas futures market continued its sideways price action Wednesday. By virtue of the modest mid-morning sell-off, bears were able to claim the day as a victory, with April prices slipping 4.1 cents to close at $5.397.

Citing high linepack and anticipation of low demand over the holiday weekend, Tennessee issued a systemwide OFO Action Alert effective with the beginning of Friday’s gas day and said it expected the alert to remain in effect through Monday. Its bulletin board posting listed actions that customers under Rate Schedules SA, LMS-PA and LMS-MA could take to avoid penalties.

Anticipation of an even larger gas storage withdrawal this week and higher cash prices have continued to prompt short covering and draw additional buying interest into the futures market. The May contract added 10.1 cents on Tuesday, closing at $5.653 with a high of $5.695, and the out-months made even steeper gains.

In reaction to forecasts calling for moderating temperatures and in anticipation of Thursday’s release of fresh storage data, natural gas futures slumped Wednesday amid light long liquidation. And although the March contract finished with a 11.8-cent decline for the session to close at $5.644, it remains in an uptrend on the daily chart. Estimated volume was heavy, with an estimated 101,308 contracts changing hands.

Last week’s sudden jolt upward in spot natural gas prices on anticipation of a cold winter was another indication of the “fickleness” of the market, according to the California Energy Commission’s chief natural gas watcher, Bill Wood, who was dismayed by the latest price swing last Tuesday.

This week’s sudden jolt upward in spot natural gas prices on anticipation of a cold winter is another indication of the “fickleness” of the market, according to the California Energy Commission’s chief natural gas watcher, Bill Wood, who was dismayed by the latest price swing Wednesday.

President George W. Bush put an end to a lot of anticipation at FERC last Tuesday when he announced his plans to nominate Texas regulator Patrick H. Wood III and Pennsylvania regulator Nora M. Brownell for the two vacant commissioner spots on the Commission. But the president was mum on whether Wood would replace current FERC Chairman Curt Hebert Jr.

Williston Basin Interstate Pipeline Co. is in the midst ofupgrading firm transportation capacity on its system inanticipation of supplying cheaper Powder River Basin gas toshippers on Northern Border Pipeline, who it believes will bedeprived of economical Canadian gas supplies when Alliance Pipelinegoes into service in October.

Williston Basin Interstate Pipeline Co. is in the midst ofboosting firm transportation capacity on its system in anticipationof supplying cheaper Powder River Basin gas to shippers on NorthernBorder Pipeline, who it believes will be deprived of economicalCanadian gas supplies when Alliance Pipeline goes into servicelater this year.