Bound

Not forecasts calling for cooling temperatures, nor record lowsset in the nearby heating oil contract could entice the natural gasfutures market to break out of its month long trading rangeTuesday, as many traders decided instead to play it safe and waitfor a more clearly defined price signal. The March contract drifted1.2 cents lower to settle at $1.795 after being limited to a narrow5-cent trading range.

The FERC staff has indicated it may not be able to finish itsenvironmental review of the proposed New York-bound MillenniumPipeline in time for the Commission to issue a final certificate byJune 1, 1999, as the pipeline has requested. But even if this turnsout to be the case, project sponsor Columbia Gas Transmission saysit still intends to meet the planned in-service date of Nov. 1,2000. That would coincide with the start-up date for the AlliancePipeline.

Trading at Nymex yesterday continued in the choppy, range-boundmanor that has plagued the market for most of November. Againtraders lamented the lack of a clear direction or price trend inthe futures pit. The December contract was held to a tight, 6-centtrading range and settled at $2.394 after never fully recoveringfrom a lower opening.

The sponsors of Canadian-bound Vector Pipeline and TristatePipeline have been discussing the possibility of combining the twoprojects, but so far no agreement has been reached, according to aspokesman for one of the sponsors.

The futures market opened stronger Wednesday, and looked poisedto remain range-bound ahead of the weekly American Gas Association(AGA) storage report. But a crowd of sellers came out in theafternoon, sending the September contract down 6.8 cents to $1.917.Estimated volume was 83,479.

Just as the old saying about the lion and the lamb goes, no onecan ever be sure what kind of weather March will bring. This lackof clear fundamental direction has made its way to the New YorkMercantile Exchange, where the spot April contract was unable tobreak outside of a tight $2.115-$2.205 trading range last week.Since April had virtually no room to move, it is fitting the spotmonth could settle the week only 0.8 cents higher at $2.137.