Approach

Cash numbers that had been firming for nearly all of last week finally headed back down Friday despite the prospect of cool to freezing weekends almost everywhere. Instead, traders looked ahead to general warming trends early this week, some of them due to start before Monday, and behind to Thursday’s screen drop of nearly a quarter in sending prices lower.

With the White House last week reiterating its support for a voluntary approach to regional transmission organizations (RTO), FERC Chairman Pat Wood on Wednesday said that if his agency doesn’t have the “tool” of being able to order mandatory participation in the regional grid operators, the Commission will effectively be crippled in its efforts to set up regional power markets.

Gas futures market observers were startled Wednesday when the October contract bolted 23.8 cents higher to $4.968 ahead of what many experts forecasted would be a large gas storage injection number in Thursday’s weekly EIA storage report.

BP’s oil and natural gas reserves in Alaska approach 7 billion boe — the largest single item within its global portfolio — and with those types of numbers, the company will remain a major North Slope player for at least 40 years, and probably longer than that, an executive affirmed last week.

Amid a heavy round of market-on-close commercial selling, natural gas futures dropped perilously close to new 34-month prompt-month lows yesterday as traders — armed with the knowledge that temperatures are well-above normal across much of the East — gained confidence that there would not be a short-covering rally until after the February contract goes off the board Tuesday. With that, February completed its penultimate trading session at $1.908, down 12.9 cents for the session.

Despite bearish storage data and the formation of a tropical storm in the northwestern Caribbean Sea Wednesday afternoon, natural gas futures shuffled mostly sideways Thursday as neither bull nor bear was willing to propel the market very much in either direction. After being held to a relatively-tight, 15-cent trading range, the December contract finished a tenth of a cent lower at $3.29. Estimated volume was 73,349 contracts.

This represents a new kind of approach by the Commission to the market, “which is that we’re acting not reacting,” said Commissioner Nora Brownell. The creation of this mechanism does not necessarily mean FERC has seen a “pattern of abuse” by pipelines that would warrant “more vigorous pursuit” of OFO activity, she noted. “We are simply setting up the mechanisms by which we will know them [OFO abuses] when we see them and be able to deal with them.”

Despite a “go slow” approach toward electric competition in Florida that has already turned away Duke Energy, Enron Corp. appears to be making headway in the quest to enter the tightly guarded state, according to a recent SCIENTECH IssueAlert by Will McNamara. The community of Deerfield Beach, FL recently gave Enron approval to build a natural gas-fired power plant one mile north of a site it abandoned last week “amid fierce opposition.”

Despite a “go slow” approach toward electric competition in Florida that has already turned away Duke Energy, Enron Corp. appears to be making headway in the quest to enter the tightly guarded state, according to a recent Scientech IssueAlert by Will McNamara. The community of Deerfield Beach, FL recently gave Enron approval to build a natural gas-fired power plant one mile north of a site it abandoned earlier in the week “amid fierce opposition.”