Dips

The futures traders who managed to stay alert during Tuesday’s lethargic trading session were able to push the March contract below Monday’s $2.08 low and drop the daily close 4.3 cents to $2.074. But the market remained range-bound with very little fundamental news to prompt significant movement. The high for the day was set just after the opening bell at $2.14 and the $2.070 low was reached just prior to the end of regular trading.

With the exception of plunging Northeast citygates, softness was rather mild Thursday in other regions. Nearly all non-Northeast points ranged from essentially flat to down less than a dime. But several sources saw signs of much greater price weakness to come in today’s trading for the weekend.

Enron Industrial Markets announced Monday it has signed a 15-year risk management and procurement outsourcing agreement with steel processor Huntco Inc. Under the contract, Enron will provide inventory price risk management services and will eventually provide more than 600,000 tons per year of hot-rolled, cold-rolled and galvanized steel products to Huntco Steel, a subsidiary of Huntco Inc.

Despite snow in Calgary and modest disruptions of Gulf of Mexicosupplies by Tropical Storm Helene, nearly all points softened a bitThursday, with most of the declines less than a dime. Californianumbers took the biggest hits of more than 20 cents, while tradersof Canadian gas at Aeco, Sumas and Stanfield saw flat to slightlyhigher pricing.

Cash prices were already headed downward Monday in the greatmajority of cases, but that’s nothing like the beating they’reexpected to take today after futures went into a free-fall, losingmore than 40 cents in the July contract.

While nearly all the production-area points held steady withchanges of no more than a penny or two in both directions, it wasdelivered prices in the Northeast, Midwest and California that gavethe cash market a taste of volatility Thursday. Northeast citygatesrepeated as the day’s big losers with declines from about 35-38cents (Transco Zone 6-NYC and Texas Eastern M-3) to more than 50cents (Iroquois Zone 2 and Algonquin citygate) as the regionexperiences a very slow warming trend from its early-week chill.Ranges were very large as prices fell steadily while tradingproceeded, one source said.

Frenetic activity continued in the natural gas pit yesterday ina see-saw battle that produced two rallies, two dips and oneenormous 11.5-cent trading range. By the time the dust had settledand the orders were processed, the battle-weary August contractmanaged a 3.2-cent advance to settle at $2.574 on its penultimatetrading day.

Statistics recently released by the Oklahoma CorporationCommission (OCC) show gas production in the state last year reachedits lowest level since 1968. However, OCC Commissioner Bob Anthonysaid he sees no cause for alarm and expects little or no furthererosion in production this year forward.