Cash

Prices achieved broad-based small gains Tuesday largely based onan initially firm screen and lingering cool weather in the West,but were retreating in the late going as futures eventually movedlower.

Despite constructive gains in both the cash market and crude oilfutures market and following a string of gains in seven of the lasteight trading sessions, natural gas futures gave back a nickelyesterday as traders weighed in on the extremely technicaloverbought condition that existed in the market. And althoughTuesday’s modest retreat did little to satisfy those overboughtconditions, analysts question how much further the market will fallbefore buyers step back in.

The cash market finally caved in Friday under the weight of verylittle heating demand and abundant available supplies, sendingprices lower for the first time in the fledgling March aftermarket.

The deal advances Houston-based Reliant’s strategy of owning generationin key U.S. regions where it can leverage its trading and marketing. Withthe Sithe PJM assets, Reliant will have total net domestic generating capacityof more than 23,000 MW operating in seven states.

Reliant Energy agreed to pay Sithe Energies $2.1 billion in cashfor 21 power plants in Pennsylvania, New Jersey and Maryland (PJM)with 4,276 MW of net generating capacity.

While winter weather finally made an appearance in the Northeastand Midcontinent last Friday, major price movement in most marketareas did not. Sources in the Midcontinent and Northeast citedweather forecasts calling for major temperature warm-ups for thisweek as the major reason for the market’s inability to rise.

Prices at most points increased yesterday as influences fromstorage plays and a rising futures screen overcame a lack ofseasonal cold weather in major market areas. In general, upticks ofa few cents were the most common in the West, Rockies, Gulf Coastand Midcontinent. The Northeast, however, continued the fall itstarted on Monday, as many points in the region lost anywhere fromabout a nickel to more than a dime.

A futures screen that was almost a dime higher during morningcash trading and continued cold temperatures were enough to allowprices to put even more distance between themselves and indexesTuesday. Meanwhile, transport-constrained Northeast citygates wereback for a repeat performance of their skyrocket act from lateJanuary.

Northwest Natural Gas announced the sale of its Canadian oil andgas exploration subsidiary, Canor Energy Ltd, for C$87.5 million incash to Celsius Energy Resources Ltd, a Canadian exploration andproduction company owned by Questar Corp.