Brisk

With the stimulus of the state’s electricity and natural gas crunch lingering, the pace of new natural gas well drilling in the northern half of California has nearly doubled over last year, according to state officials. Notices to drill new gas wells are coming in at a pace not seen since the mid-1980s, and the total for any single year in the 1990s will soon be surpassed.

A failed technical move higher, followed by a brisk liquidationof fresh longs left even veteran traders shaking their heads in thenatural gas pit Friday, as prices plummeted lower amid heavytrading. The January contract was dealt the largest blow, tumbling13 cents lower to close at $2.331. February also experienced doubledigit losses, slipping 10.3 cents to $2.335.

Dynegy’s California-bound capacity on El Paso Natural Gas wentup for grabs last week, and while the pipeline expects a possiblestampede of customers, they aren’t expected until nearly the end ofthe auction period. With a right-of-first refusal held by Dynegy,bids for the capacity are expected to be higher than last time,too.

The New York Mercantile Exchange (Nymex) reported a fairlyactive first day of trading for the eastern electricity futurescontracts on Friday, with a total volume of 939 contracts traded.This, however, was 282 fewer contracts than the number tradedduring the first day of the western electricity contracts in 1996,a Nymex official said.