With no drag from a weekend load slump playing a role, colder weather due in the Northeast and Midwest early this week, and the delayed support of a bullish storage report and its accompanying screen run-up Thursday, the March aftermarket got off to an impressively strong launch Friday.
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In sympathy with the largest single-day drop in crude oil prices since the Gulf War, and amid continued fears that a global recession is inevitable, natural gas futures funneled to new 30-month lows Monday, as non-commercial traders extended their short holdings in a market notably devoid of buyers. The October contract was the hardest hit, tumbling 9% or 19.3 cents to close at $1.91. The October contract is set to expire at 2:45 p.m. (EDT) Wednesday, an hour later than other daily settlements this week, in an effort to accommodate the 2:00 p.m. (EDT) release of fresh storage data.
Despite a high weekly storage injection of 36 Bcf last weekcompared to a five year average build of only 13 Bcf, according tothe American Gas Association (AGA)’s weekly report yesterday, thefutures market soared much higher and yanked cash prices up withit. Most daily cash price gains ranged from 20 cents to 35 cents.
Achieving a vast amount of success in Georgia’s newlyderegulated retail gas industry came at a significant price, SCANAsaid last week as the South Carolina-based company reported 1999earnings of $179 million, or $1.73/share of common stock, down from$223 million, or $2.12/share in 1998.
Despite large increases in both operating income and income fromcontinuing operations, Columbia Energy Group’s 1999 bottom lineregressed from 1998, as a hostile takeover bid from NiSourcecombined with severe losses caused by Columbia’s marketingoperations to undermine the company’s overall performance.
Despite continued expansion of revenues in energy trading andservices, PG&E Corp. reported last week continued depressedearnings results in those two areas, along with red ink in itsTexas operations. Its traditional Pacific Northwest interstatepipeline, combination utility and merchant power plant businessesall continue to be its money-makers, although down or about thesame compared to similar three-month and nine-month results lastyear.
Gas buyers certainly had no complaints about “storm hype”keeping prices artificially high Tuesday. Even with one of the mostdangerous hurricanes of the century pounding the Bahamas andbearing down on the southeastern U.S., its relative lack of threatto Gulf of Mexico production did nothing to avert cash price dropsof a dime or more-sometimes much more-in nearly every market. Onlythe Northern California points (Malin and PG&E citygate)managed to keep their declines in single digits, and even they fellalmost a dime.
While efforts to deregulate the electric industry at both thestate and federal level drag on, at least one internationalobserver found U.S. gas deregulation worthy of praise. RobertPriddle, executive director of the International Energy Agency(IEA) in Paris, told reporters at the 17th Congress of the WorldEnergy Council that the United States leads the world in gascompetition.
While efforts to deregulate the electric industry at both thestate and federal level drag on, at least one internationalobserver found U.S. gas deregulation worthy of praise. RobertPriddle, executive director of the International Energy Agency(IEA) in Paris, told reporters at the 17th Congress of the WorldEnergy Council that the United States leads the world in gascompetition. Priddle said he is heartened by the Federal EnergyRegulatory Commission’s (FERC) decision to review pipeline rateregulation. Priddle gave his talk to highlight findings of theIEA’s report card on U.S. energy policy. The findings stem from a1998 review and are published by the agency in a 152-page book.