Explain

Since coined by Federal Reserve Chairman Alan Greenspan back in 1995 to explain investors’ love of stocks, “irrational exuberance” has come to typify the stock market and its unprecedented bull rally. But last week as stock prices plummeted again, the phrase was a more apt description of the natural gas futures market, which spiked 14% amid bullish technicals unpinned by concerns over a tightness of supply this summer and next winter.

Since coined by Federal Reserve Chairman Alan Greenspan back in1995 to explain investors love of stocks, “irrational exuberance,”has come to typify the stock market and its unprecedented bullrally. But yesterday as stock prices plummeted again, “irrationalexuberance” was a more apt description of the natural gas futuresmarket, which spiked sharply amid a frenzy of short-covering andnew long accumulation. When all the dust had settled and the orderstabulated in the data room at Nymex, the numbers were staggering— the June contract rose a whopping 24.1 cents to finish at$2.689, setting a new 30-month high at $3.73 during a session thatsaw 102,978 contracts change hands.

A team of El Paso Natural Gas executives took the opportunityyesterday to explain in detail to their transportation customersthe pipeline’s new capacity-allocation proposal, but many left theFERC technical conference more bewildered than when they arrived.

The source who commented “It’s a wild and crazy market outthere” when asked Friday to explain big variations in price quotesfor Nov. 1-2 business was understating the situation by manydegrees. There seemed to be no rhyme or reason at all in the earlyNovember aftermarket when traders were reporting ranges of 25-30cents for individual points in swing deals done Friday.

The U.S. Court of Appeals for the DC Circuit Tuesday remanded tothe FERC the Commission’s ruling that interstate pipelines must getprior approval before leasing capacity on other pipelines. Thedecision came at the behest of Coastal affiliates ColoradoInterstate Gas and ANR Pipeline in their petition for rehearing ofa 1996 ruling from a Texas Eastern Transmission case. The Coastalaffiliates maintain the preclearance requirement burdens them witha competitive disadvantage.