Drags

As the summer heat drags on and the natural gas storage surplus over last year continues to decline, natural gas prices are on the rise. After taking 2004 off, this inverse relationship between storage and gas price appears to be healthy once again, according to Stephen Smith of Stephen Smith Energy Associates.

Aquila Inc.’s first quarter losses, though anticipated because of its decision to wind down its once mighty wholesale energy trading business, showed a glimmer of positive news Thursday, with the company’s domestic utility networks up more than 50% from a year ago.

Under the shield of anonymity, an economist for a national think tank and a leader in the California legislature spoke candidly last Friday to the spring general meeting of the Western Power Trading Forum in Ojai, CA, concluding for different reasons that political and economic issues have so far stymied the creation of a broadly supported short-term fix to the state’s electricity woes.

Nymex front months continued to lose strength yesterday withNovember opening sharply lower and slipping downhill fast duringlight morning trading. There was significant selling early asNovember dropped into the low $2.70s before 11 a.m. then choppedsideways the rest of the day, before ending at $2.744, less than 2cents off its daily low of $2.725 and down 8 cents for the day.