Bullish

The prospect of privatization of Mexico’s energy industry underits President-elect Vicente Fox has California interests salivatingbecause already robust demand and infrastructure activity in NorthBaja and along the other northern states promises to get evenhotter under the new political leadership in the next few years.

Amid easing tensions in the Middle East and a price pullback inthe nearby crude oil trading pit, natural gas futures were softerFriday, as traders elected to take profits following last week’salmost 80-cent rally. The November contract finished at $5.537,down 9.3 cents on the day, and 24.3 cents off Thursday’s pricepeak.

The cash market remained bullish Tuesday despite flaggingsupport from energy futures. That was being replaced by moderateheating load starting to surface in northern market areas alongwith strong power generation demand and storage concerns in theWest.

Cash prices continued to advance Wednesday with the West onceagain leading the procession, and there was no hint of a setback insight as the screen rose above $5 for October and reported storageinjections remained below par. Crude oil futures also were verystrong, with the October contract settling a dime short of $35/bbl.

For the sixth week in a row, natural gas futures climbed higherFriday as traders once again eschewed the short side of the marketahead of the weekend. After setting the tone with a $4.60 openingtrade, bulls ran the show at Nymex Friday, boosting the promptcontract 8.8 cents to close at $4.628.

As expected, the cash market used the bullish futures reactionto Wednesday afternoon’s storage report as a springboard foracross-the-board gains of about a dime or more Thursday. But a latescreen retreat, continued lack of cooling load in northern marketareas and the usual dropoff in weekend demand raised doubts aboutany further increases today.

The Fourth of July may have been last Tuesday, but pyrotechnicscontinued for the rest of the week in the natural gas pit astraders pushed prices lower Wednesday in sympathy with a 6% drop incrude oil prices, only to retrace a portion of those losses in ashort-covering buying spree Friday.

In the midst of bullish earnings projections for the secondquarter in early July, San Diego-based Sempra Energy’s new boss,CEO Steve Baum, has been busy outlining his vision for employeesand the financial community. In a nutshell, it calls for emphasison growing a nationwide energy retail operation, de-emphasizingregulated utility operations and accelerating the change tocompetitive energy markets nationwide. It also may includeunloading start-up LDCs.

In the midst of bullish earnings projections for the secondquarter in early July, San Diego-based Sempra Energy’s new boss,CEO Steve Baum, has been busy outlining his vision for employeesand the financial community. In a nutshell, it calls for emphasison growing a nationwide energy retail operation, de-emphasizingregulated utility operations and accelerating the change tocompetitive energy markets nationwide. It also may includeunloading start-up LDCs.