Brings

With little on either the technical or fundamental news front, natural gas futures shuffled sideways and lower yesterday, as traders weighed moderating temperatures against the potential for a bullish storage report Wednesday. At the closing bell the September contract was 4.1 cents lower at $2.999. The 12-month strip suffered only a minor setback, down 1.6-cents at $3.443.

Dropping beneath $4.00 for the first time since early August, natural gas futures continued on the slippery slope downward Friday as traders pressured the market lower for the third straight day. With Friday’s 8.1-cent decline and $3.973 close, the June contract has tumbled 96.7 cents since becoming spot contract at Nymex a month ago. June expires at 3:10 p.m. (EDT) today.

Pacific Gas & Electric finally brings an extended Stage 3 high-inventory OFO to a halt today. The OFO, which caused steep plunges at PG&E-related pricing points Friday when it was issued for Saturday, got extended through Sunday at zero tolerance for positive daily imbalances. The tolerance was loosened considerably to 15% in Monday’s OFO, but $5/Dth penalties remained in place.

After failing for the third day in a row to sustain a move beneath $4.20, natural gas futures rallied yesterday as traders began to cover shorts initiated during the recent price erosion. At the closing bell, the June contract was 14.6 cents higher at $4.348.

California’s energy woes have taken on the look and feel of a political campaign with the state’s beleaguered governor running a re-election campaign more than 18 months before voters go to the polls. However, if Hollywood were doing a movie on the continuing drama, none of the principal actors — except the governor — would be delivering predictable lines to the camera.

A day following a major rate reduction deal for Niagara Mohawk’spower customers related to the New York utility’s merger withNational Grid, NIMO announced a gas supply management transactionwith Southern Energy that is designed to stabilize its wholesalegas costs.

With little in the way of fresh fundamental news, natural gasfutures slipped lower in a holiday-abbreviated session last Fridayas traders took profits following a six-day, $2.30-cent pricerally.

A solid blast of cold, wintry weather and a technically bullishfutures screen produced tremendous price increases and enormousprice ranges nationwide last week. On Friday, there was little onthe horizon to change the current market picture other than thenormal weekend decline in demand.

Following on the heels of Thursday’s losses, natural gas futuresgapped lower on the open Friday as traders took profits on theirlong positions in sympathy with similar selling in the crude oilpit. October crude finished down 5% on the day at $33.63 per bblwhile October natural gas slipped 2.4% to close at $4.880. OPEC wasscheduled to meet over the weekend in Vienna to discuss possibleproduction increases (check back with http://intelligencepress.comfor breaking news later Monday morning).