Drops

As anticipated after Wednesday’s dollar-plus screen plunge, cashprices also were falling bigtime Thursday. Exceptions to declinesof 50 cents or more were rare. However, some sources detected signsthat the huge erosion of cash numbers that started late last weekmight be near an end.

There was almost no consistency in price movements Wednesday,although a slight majority of the changes were downward. Rises andfalls mixed with each other in the Gulf Coast andMidcontinent/Midwest.

Under pressure from marketers and now from the state’s attorneygeneral about the legality of some of the rules, the Georgia PublicService Commission has dropped a proposal to require natural gasmarketers to forgive monthly bills sent to customers more than 90days late. Instead, the PSC unveiled a new package of rules thatamong other things would heavily fine marketers for repeated andwillful noncompliance.

Even with its natural gas production lagging by more than 100MMcf/d and oil production dropping by more than 15,000 b/d,Burlington Resources was still able to boost its net income from1999’s third quarter of $61 million ($.28 per share) to this year’sthird quarter level of $200 million ($.93 per share) due torealized oil and gas prices rising 47% and 42% respectively fromlast year’s 3Q.

California’s once-dominant non-utility electric serviceprovider, Tustin, CA-based Commonwealth Energy, has turned backabout 18,000 commercial customer accounts to their incumbentutilities and is working on a fixed-price retail product to marketto San Diego Gas and Electric customers later this year.

Prices continued to soften Friday but except for some steepdrops in the West, the weekend declines were considerably smallerthan many traders had been expecting.

Futures succumbed to another major technical correctionyesterday as the July contract gapped 2.5 cents lower at the openand dropped a dime early on before plummeting after the AGA gasstorage report came out at 2 p.m. At the end of the regular tradingsession, July was down 34.9 cents, August had dropped 35.1 centsand September was off 33.1 cents. The July contract had a 39-centrange for the day, trading as high as $4.335 and as low as $3.930.

The major rally that lifted the July contract 35.5 cents to$4.398 on Monday, gave way following some selling pressure earlyTuesday morning. After reaching a high of $4.505, July tumbled 26cents to a low of $4.245, and ended the day down 10.4 cents to$4.294. Volume was heavier than on Monday with 100,223 contractschanging hands.

The cash market decided to calm down Friday following the heatwave and futures excitement from earlier in the week. Having littlein new guidance from weather or a static screen, prices ranged fromflat to down about a nickel in most cases, with larger declines oneither side of a dime occurring in the cooled-off Northeast.