Control

The New York Independent System Operator’s (NYISO) comprehensive mitigation plan for the New York Control Area (NYCA) is a milestone in the effort to design and implement competitive, fair power markets, Energy Security Analysis Inc. (ESAI) concludes in a recent client memo. But ESAI is concerned that the proposed mitigation regime for supply-deficient regions could act as a deterrent to much needed future generation and transmission investment in those areas.

Besieged by a deteriorating fundamental picture in a market that is already firmly entrenched in a downtrend, natural gas futures traders pressured prices to new lows yesterday, amid a seemingly relentless barrage of selling activity. Even the season’s first triple-digit storage withdrawal (124 Bcf) failed to induce much of any buying sympathy, giving traders little choice but to continue to short the market. The February contract closed 19.7 cents lower at $2.268 and in doing so broke its previous all-time low at $2.415 notched back in February 1999.

Support for a Mackenzie River Valley natural gas pipeline through the Northwest Territories made the news again last week, as aboriginal interests — considered key to any plan — began signaling their approval to begin construction of a pipe through their lands (see Daily GPI, Oct. 11) . While the producers group touted the support of the Acho Dene Koe in its carefully detailed memorandum of understanding (MOU) to back a C$3 billion pipe, still another group, composed of development corporations and businesses — no producers — emerged on Thursday offering a 100% aboriginal ownership of any pipe built.

Support for a Mackenzie River Valley natural gas pipeline through the Northwest Territories made the news again last week, as aboriginal interests — considered key to any plan — began signaling their approval to begin construction of a pipe through their lands. While the producers group on Tuesday touted the support of the Acho Dene Koe in its carefully detailed memorandum of understanding (MOU) to back a C$3 billion pipe, still another group, composed of development corporations and businesses — no producers — emerged on Thursday offering a 100% aboriginal ownership of any pipe built.

Punctuated by a 5-cent free-fall in the last five minutes of trading, natural gas futures slumped lower yesterday as traders priced yet-to-be-released storage data — guilty of being bearish, until proven innocent — into the market. With that the September contract concluded its penultimate trading day with a 12.9-cent loss to close at $2.415.

While the trading community continued to stew over what virtually everyone agreed was an outlandishly low AGA storage injection figure, it sent cash prices diving Friday. Declines tended to be between about 15 and 35 cents, with those in the 20s most common. Many points were giving up nearly all the price territory they had gained the day before.

Fueled by Wednesday’s 30.6-cent gain, natural gas futures surged higher at the open yesterday as traders salivated over the probability of another sub-100 Bcf storage figure next Wednesday. However, the combination of mild weather forecasts for the weekend and nervous new length proved to be too much, leaving bulls almost defenseless as prices cascaded lower in the afternoon. The August contract closed at $3.128, down 14.8 cents on its penultimate trading day.

In a session notably void of fresh fundamental or technical news, natural gas futures moved sideways yesterday as many traders opted to wait until the beginning of the three-day settlement period and the release of storage figures today before placing their orders. At $2.97 the August contract finished 0.8 cents lower on the day and just about in the middle of its 3-day $2.915-$3.01, trading range. Volume was relatively weak with just 61,764 contracts changing hands.

With little in the way of fresh fundamental signals from which to take a cue, natural gas futures took the path of least resistance lower Friday as traders pressured the market back below key support at $4.00. The July contract led the way, tumbling 5.9 cents to close at $3.979, just a tick off its $3.98 opening trade for the week. Estimated volume was extremely light, with just 39,677 contracts changing hands.