Dive

Spikes of 40-50 cents or so Friday at San Juan Basin/Rockies points were in sharp contrast to losses of about 15 cents to more than 30 cents in the rest of the market.

Struggling with a well of problems in the past few months, the once venerable Duke Energy’s quarterly earnings plunged 71% from a year ago. Huge merchant energy losses, problems in California, the deferral of several large generation projects and mounting severance costs all played a part in the losses. But Duke disclosed more bad news last week, revealing that the Securities and Exchange Commission (SEC) launched a formal investigation in mid-October of its round-trip energy trades. The SEC’s stepped up scrutiny joins two inquiries already under way by the Commodity Futures Trading Commission (CFTC) and a Houston grand jury, which subpoenaed Duke last summer (see NGI, July 15).

Duke Energy’s third-quarter earnings plunged 71% from a year ago, as the company struggled with a drop in energy costs, the collapse of the merchant energy business, problems in California, pull-outs in planned generation projects and severance costs from layoffs. But as if that was not enough, Duke revealed Thursday the Securities and Exchange Commission’s (SEC) inquiry into the company’s round-trip trading practices has been elevated to formal status. This is on top of the investigations already being carried out by the Commodity Futures Trading Commission (CFTC) and a Houston grand jury, which subpoenaed Duke over the summer for information on its bogus trading activities (see Daily GPI, July 15).

Despite severe erosion of Nymex futures prices for natural gas, crude oil, heating oil and Appalachian coal Monday morning, cash gas numbers refused to “follow the screen.” Cash quotes ranged from flat to a few cents higher or lower in most market areas. Rockies points were recovering from Friday’s plunge that had a few priced below a dollar for a while. Deals for CIG, Cheyenne Hub and Questar gas could still be found in the $0.90s Monday, but generally they were in the $1.00s, according to a couple of marketers.

There was still plenty of heat to go around, but expectations of another bearish storage report and further dismissal of a tropical wave threat to the Gulf of Mexico led most points to range from essentially flat to about 15 cents lower Wednesday. The lion’s share of declines were less than a dime, and several Rockies pipes achieved double-digit increases.

Reflecting the nose-dive in wholesale prices, Southern California Gas Co. in July whacked its retail prices to residential and small business customers by 48%, dropping from 52.1 cents/therm in June to 27 cents this month.

Reflecting the nose-dive in wholesale prices, Southern California Gas Co. in July whacked its retail prices to residential and small business customers by 48%, dropping from 52.1 cents/therm in June to 27 cents this month.

Essentially ignoring an expiration-day dive by the June futures contract, eastern points (except for moderately weaker Midwest citygates, Appalachian pipes and Trunkline in Louisiana) tended to range from barely lower to as much as about a nickel higher in late-May swing trading Tuesday. Most increases, though, were little above flat.

Despite turning downward again Friday, the screen’s uptick of nearly 15 cents the day before had a residual supportive effect for Friday’s cash prices in eastern and Permian/Waha markets. They ranged from flat at a couple of Northeast points to 15 cents or so higher (Gulf South was a rare softer point in Louisiana), with most gains between a nickel and a dime. Most western points declined by various amounts ranging from small to huge.