Despite the sharp change in market direction the past twotrading days, with prices falling as much as 12 cents at somepoints Monday, there was no consensus on whether this is thebeginning of a lengthy slide or just a breather before anothersurge upward.
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Weekend Prices Move Higher for a Change
Defying the conventional wisdom that lower gas demand over aweekend usually causes softer prices, cash prices put on a show ofstrength Friday with nearly all points rising by a nickel or more.An increase of less than a penny in the Henry Hub futures contractprovided little support for the cash market, so sources concludedit must have been the residual effect from Thursday’s screen run-upof nearly a dime that helped push up cash quotes Friday.
Canadian Producers Predicting Price Jumps
Canadian producers expect their natural gas prices to rise by asmuch as 60% when the next heating season catches up with effects ofthe 1998-99 drilling slump.
BP Amoco Adding Arco to Its Arsenal
BP Amoco might want to change its name to BP, Etc. now that ithas announced plans to acquire Los Angeles-based Atlantic RichfieldCo. (Arco) in a $26.8 billion deal. The news comes only monthsafter the closing late last year of the marriage of BP and Amoco.
RMOGA Snuffed by Low Prices, Industry Change
Low commodity prices and industry belt-tightening picked off theRocky Mountain Oil & Gas Association (RMOGA). The trade groupsaid it will shut its doors June 1. The move comes amidreorganization of the American Petroleum Institute (API) andfollows talk last year of combining the Natural Gas SupplyAssociation with API. Clearly, the pressure is on to cut costs, andtrade association dues paying has become less of a priority.
Cash Uses Screen as Springboard for Small Increases
Fundamental weather demand didn’t change much, so it must havebeen the impetus from a rising Henry Hub futures contract thatallowed cash prices to post widespread small gains Tuesday, sourcessaid. Few of the increases were much more than 1-3 cents except forSumas, where prices rose as a force majeure remained in effect atWestcoast’s McMahon Processing Plant (see Transportation Notes).
PA Governor Proposes Tax Change As Springboard for Gas Legislation
Pennsylvania Rep. Frank Tulli, one of the sponsors of a statenatural gas deregulation bill that stalled last year, said thelegislation once again is on the fast track now that Gov. Tom Ridgehas proposed eliminating the 5% gross receipts tax levied on thestate’s residential gas users.
PA Tax Change Could Spark Gas Deregulation
Pennsylvania Rep. Frank Tulli, one of the sponsors of a statenatural gas deregulation bill that stalled last year, said thelegislation once again is on the fast track now that Gov. Tom Ridgehas proposed eliminating the 5% gross receipts tax levied on thestate’s residential gas users.
Major Rate Design Change Proposed on Nova System
TransCanada PipeLines Ltd., subsidiary Nova Gas Transmission andtwo groups of Canadian producers yesterday announced a “watershed”proposed agreement for a new pricing structure aimed at increasingthe competitiveness of the Nova system while at the same timeensuring greater rate fairness for producer-customers on thepipeline.
Cash Stubbornly Refuses to Follow Screen Down
For a change the cash market demonstrated some independence fromthe futures screen influence Wednesday. Even as futures followedTuesday’s downtick of nearly 6 cents with an even bigger diveyesterday, quotes at nearly all non-Western points either held flator managed to tack on up to 3-4 cents. This ran contrary to what anumber of traders had expected.