Event

Independence and MarketLink pipeline sponsors were forced to runthe gauntlet last week at a special FERC conference. The event drewbuses filed with t-shirted crowds of pipeline supporters and anopposing army of congressmen, state representatives, localpoliticians and landowner advocates, the likes of which hasn’t beenseen at the Commission since the Iroquois Pipeline project wasproposed in the early 1990s.

Just as Tropical Storm Bret was being downgraded to a drenchingrain event for South Texas the natural gas futures market wasundergoing a downgrading of its own yesterday, as traders tookprofits in a mid-morning sell-off. However, by mid-afternoon theNational Hurricane Center had anointed the latest two tropicaldepressions-Dennis and Emily-into tropical storms and that wasenough to convince those sellers to become buyers. That was almostenough to recoup the earlier price decline, leaving the Septembercontract to finish the session with only a half-cent loss to$3.059.

As expected, Christmas Eve was pretty much a non-event in thecash market. Virtually all holiday weekend business through todayhad been taken care of Wednesday, and though a number of tradersdid put in brief appearances at the office Thursday, they didlittle more than check what futures was doing in an abbreviatedtrading session. “We had to come in for the first half of the dayor else count it as a whole vacation day,” one marketer commented.

For the second Wednesday in a row, ebbing concerns of tropicalstorms and a “buy the rumor, sell the event” mentality has put themarket under selling pressure. In the wake of Hurricane Earl lastweek the October contract sank 13.4 cents. This Wednesday, themarket was already in the process of giving back some of Tuesday’sgains even before Tropical Depression number 6 became TropicalStorm Frances. That left the October contract down 4.1 cents tosettle at $1.833 yesterday.

A major LDC group and a pipeline group urged FERC yesterday tofavorably consider a proposal that would clear the way for gaspipelines and their customers to negotiate the heretofore untouchedarea of terms and conditions of service. The Commission has limitedits approval so far tonegotiation of rates.