Control

Calling the integrity of natural gas price reporting and price indices “extremely important,” the chairman of the Commodity Futures Trading Commission (CFTC) said he believes it is up to Congress to determine if any new rules are required to govern price reporting practices. However, Chairman James Newsome added he has “yet to see anything” that changes his belief that the commission and other regulatory agencies already possess the tools to address any misconduct that may occur.

The he-said, he-said battle for the control of El Paso Corp.’s board of directors continued on Thursday, with El Paso telling shareholders to look at its recent accomplishments and vision for the future as it votes its proxy for the June 17 annual meeting. The statements followed an investor conference on Wednesday by opponents who are attempting to oust the board (see Daily GPI, June 5).

Two former executives of Dynegy Inc. are heading up a new limited partnership that will acquire and control power and natural gas assets in the U.S. StoneCap Management LLC on Wednesday announced the formation of the StoneCap Group L.P., whose principals include Hugh Tarpley and Milton Scott.

After edging modestly higher in the 30 minutes following release of storage data showing a 208 Bcf withdrawal, the natural gas futures market kicked into overdrive at 11 a.m. Thursday as bulls made another attempt at the $6.00 mark. However, after notching a new all-time high in March futures and a new 23-month prompt contract top, the market slumped at the close, denying bulls their coveted $6.00 print yet again. March finished at $5.828, up 18.4 cents for the session but 8.2 cents off its new $5.91 peak.

Despite overbought conditions and forecasts calling for warming temperatures, natural gas futures finished the week on a positive note Friday as traders bid the market higher in sympathy with cash prices that remain at a premium to futures. There also was apprehension of the release of potentially bullish storage data Thursday. However, the gains were a winter-month-only phenomenon, as advances in February and March were in sharp contrast to losses throughout the rest of the contracts.

In sympathy with firmer crude oil prices and in reaction to constructive weather forecasts, prompt month natural gas futures rebounded off early lows Monday to post a fifth-straight daily advance. The January contract gained 5.7 cents to $5.341 and the February contract notched a 6.2-cent rise to $5.297.

With Republicans clearly in control of both the Senate and House following Tuesday’s elections, energy industry and Capitol Hill sources said they expect congressional approval of an omnibus energy bill to be delayed, possibly for another year, so that GOP lawmakers can craft legislation “more to their liking.” They also foresee an end to “FERC bashing” at hearings.

After dropping a dime in a knee-jerk reaction to slightly bearish storage data (42 Bcf injection) released at 10:30 a.m. EDT, natural gas futures chopped sideways for the rest of the session Thursday as traders groped for fair value in a market that has witnessed a 58-cent trading range since Oct. 1. As it turned out, nothing was settled, with about half the traders, brokers and analysts surveyed by NGI yesterday expecting higher prices Friday and half looking for more weakness. The November contract closed at $3.828, down 9 cents for the session and just above support at $3.795.

In sympathy with lower crude oil prices and in reaction to the virtual certainty that neither Tropical Storm Dolly nor Edouard will pose a threat to production, natural gas futures continued their week-long descent Tuesday as locals and commercial traders liquidated long positions. With a gap-lower open on the daily chart, bears set the tone right from the outset. However, by 11 a.m. EDT, the selling pressure had dried up, leaving the market to chop sideways throughout the rest of the session. October finished at $3.132, up 3.2 cents from its morning low, but down 16.4 cents for the day.