Broken

Modest to large gains in the Rockies and San Juan Basin ran counter to an overall trend Monday of price decreases that in only a few cases varied from a range of about a dime to 20 cents.

The pattern got broken. For a change cash prices did not follow the previous afternoon’s screen higher, which had been the norm in previous weeks whenever there was a significant change in futures after the morning’s cash deals were complete. Instead, most points were flat to about a dime lower Tuesday.

Records were broken at the New York Mercantile Exchange during the first half of the year, as the continuing credit and financial crisis in the energy industry following Enron’s bankruptcy forced many companies to turn to the exchange instead of to the megamarketers and industry counterparties to lay off risk and execute trading strategies. Nymex said it set records for overall volume and a host of subcategories, including large increases in gas futures and options trading.

SEC Chairman Harvey L. Pitt last Thursday proposed sweeping changes in corporate financial oversight. He said the failure of Enron and its auditor Arthur Andersen clearly exposes the defects in the country’s “vaunted system of disclosure, financial reporting, corporate governance and accounting practices,” and the need to develop an entirely new method of financial regulation “that will restore public confidence in the integrity of the accounting profession.”

SEC Chairman Harvey L. Pitt said Thursday the failure of Enron and its auditor Arthur Andersen clearly exposes the defects in the country’s “vaunted system of disclosure, financial reporting, corporate governance and accounting practices,” and the need to develop an entirely new method of financial oversight. Pitt outlined a Securities and Exchange Commission plan to form a new public entity that will be empowered to perform investigations, bring disciplinary proceedings, publicize results and restrict individuals and firms from auditing public companies.

The spell of rising prices based on little or no fundamental support finally was broken Wednesday. Price movement ranged from flat to about 15 cents down, with most declines between about a nickel and a little more than a dime. Western numbers tended to see the smallest losses due to a blast of colder than expected weather that prompted a low-linepack OFO by El Paso (see Transportation Notes).

At the risk of sounding like a broken record, prices continued to slide Wednesday for pretty much the same reasons that they have through nearly all of the May aftermarket so far: a relative dearth of weather demand for either heating or air conditioning; a weak screen; and a decidedly blasé attitude about any urgency in refilling storage.

Records are made to be broken, or so the saying goes. Whileprices continued to dive Friday from the Rockies/Southwesteastward, the California and Pacific Northwest markets kept revvingit like never before. Malin and the PG&E citygate hit the newall-time high mark of $61.

As one source had predicted, it didn’t take long for the spot pricerecord to be broken again (see Daily GPI, Dec. 7). Despite softness at nearly allother points, the Southern California border kept zooming higherThursday to lift the price bar again to a peak of $53. “Now that’swhat I call breaking a record!” exclaimed a marketer, noting that itexceeded Wednesday’s previous record of $41 by a full $12.