Bargain

“Bargain basement” severance taxes and a “dizzying array of exemptions and deductions” for the energy industry is costing Colorado a lot of money, according to a report by a nonprofit renewable energy group.

Federal prosecutors in Houston this week urged a judge to follow the arranged plea bargain against Lea Fastow, who is scheduled to be sentenced next week. She is the wife of former Enron Corp. CFO Andrew Fastow, and pleaded guilty earlier this year to filing a false tax report (see Daily GPI, Jan. 15).

Adding to Tuesday’s modest price advance, natural gas futures surged higher Wednesday as early morning commercial buying triggered local short-covering at midday. Buying was almost uniform across the 12-month strip, suggesting hedging activity by end-users who may have missed their opportunity the last time prices were near $5.25. June futures closed at $5.385, up 14.9 cents for the session. The 12-month strip, meanwhile, outperformed the prompt month, advancing 15.1 cents to $5.446.

As Enron Corp. fades slowly into history the trinkets and trappings that helped create the company’s forceful mystique soon can be had by even ordinary people.

After being “goosed higher” by the rapid development of Tropical Storm Fay in the Gulf of Mexico Friday morning, natural gas futures were hit with a wave of profit-taking late in the session as traders came to the realization that the storm would produce little more than soaking rains. By virtue of its 7.7-cent loss Friday, October’s $3.265 close was not only below the prior Friday’s settle, but also in the lower half of its $3.100-445 trading range for the week. At 103,385, estimated volume was heavy for the session.

Riding a broad stock market rally fueled by investors looking for bargain-basement deals, Williams Cos. Inc.’s stock shot up nearly 88% to close at around $1.99 a share Monday, in spite of the company’s report earlier in the day of a major net loss for the second quarter due mostly to its floundering energy marketing and trading business, which lost nearly half a billion dollars for the period. The sharp bounce in the company’s stock, which had opened at $1.06 a share, suppressed speculation about possible bankruptcy.

The Alaska Highway route is a bargain and safe, compared to the rival proposal for an offshore international Arctic natural gas pipeline known as the over-the-top route, according to an engineering study commissioned by the Yukon government. Laying pipe along the floor of the Beaufort Sea between Prudhoe Bay and the Mackenzie Delta confronts the North American industry with risks it has never faced and probably would cost almost $2 billion more to overcome, according to the report.

For the second session in a row, natural gas futures were lifted from early morning lows Tuesday as bargain buying more than offset short selling. But just like Friday, the session-long rally yesterday was not enough to recoup losses sustained on the open, leaving the market with yet another in a string of down-days. The October contract closed at $2.359, off 2.1 cents for the session, but more than a dime above its $2.255 low.

After failing to test support in the mid $2.90s following a lower open Wednesday morning, natural gas futures contracts worked their way modestly higher in the afternoon as traders elected to look past another robust storage build to focus on hot weather and technical concerns. The September contract led the advance, rising 6.5 cents to close at $3.036. Estimated volume echoed the market’s tentative nature as only 60,979 contracts changed hands.