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Despite the news that a larger-than-expected 210 Bcf was pulled from underground storage last week, natural gas futures tumbled Thursday as traders looked toward moderating temperatures next week. After extending to a new 23-month prompt contract high at $5.85 in the moments after the 10:30 a.m. EST storage release, the February contract dropped 31 cents by 11:30 a.m. The contract continued lower in afternoon trading, closing at $5.458, down 21.5 cents from Wednesday’s settle. At 111,549, estimated volume was heavy and gave credence to the price retracement.

‘Not so fast’ was the overwhelming message given Friday as the federal judge handling the Enron Corp. securities lawsuit ruled against several major financial institutions, law firms and Arthur Andersen, denying most defendants’ motions to be dismissed from the case. With the move, Enron shareholders will be able to begin the process of depositions and evidence discovery in the case, according to the University of California, which is lead plaintiff in the shareholders’ class action suit against the one-time energy giant.

Following a 36-cent rise Monday through Thursday last week, the natural gas futures market braced for a profit-taking sell-off Friday. As it turns out, the market was half right. Locals and commercial traders liquidated their longs ahead of the weekend, but what the market did not bank on was continued short-covering by the non-commercial segment of the market, which soaked up enough selling to limit the day’s losses. September finished at $3.487, down 2.8 cents on the day and roughly in the middle of its $3.44-52 trading range.

Moody’s Investors Service has changed the rating outlooks for Duke Capital and Duke Energy to “negative” from “stable” because of Duke’s report to the Securities and Exchange Commission this week that it engaged in 23 round-trip trades on electronic trading system IntercontinentalExchange (see Daily GPI, July 17 ). Although the $126 million in revenues from the trades “are not material relative to total sales, it causes some concerns about company trading practices and related controls,” Moody’s said.

Moody’s Investors Service has changed the rating outlooks for Duke Capital and Duke Energy to “negative” from “stable” because of Duke’s report to the Securities and Exchange Commission this week that it engaged in 23 round-trip trades on electronic trading system IntercontinentalExchange (see Daily GPI, July 17 ). Although the $126 million in revenues from the trades “are not material relative to total sales, it causes some concerns about company trading practices and related controls,” Moody’s said.

The significant rise in natural gas and oil prices since the first of the year has so far done nothing to encourage exploration and production (E&P) companies to increase their 2002 drilling budgets, said Salomon Smith Barney energy analyst Robert Morris Tuesday. Noting the clear trends emerging from first quarter reports, most producers appear willing to wait for compelling evidence that prices will remain on the rise, and use the cash flow from the current higher commodity prices to reduce debt and pursue acquisitions.

Cross Sound Cable Co., the developer of a high-voltage electric transmission cable across Long Island Sound, scored a major victory last week after Connecticut state lawmakers fell short in their efforts to override a veto of legislation by Connecticut Gov. John Rowland that called for a one-year moratorium on the siting of new electric cables and natural gas pipelines in Long Island Sound and would have been applied retroactively to the Cross Sound Cable project and several gas pipeline projects.

Despite languid cash market prices and plentiful supply heading forward, natural gas futures exploded higher Friday as traders covered shorts and squared their books ahead of the four-day holiday weekend (some cash traders admitted having to work a half-day Monday, but the futures market will remain closed until 7 p.m. EST Christmas Day for Access trading and until 10 a.m. Wednesday for regular pit trading). By virtue of its 20.9-cent rally and $2.895 closing price, the January contract broke to new three-week highs Friday, and moved above the February contract for the first time since Nov. 2. Heavy trading activity punctuated the move, with 116,361 in estimated volume.

If California utilities fail to pay suppliers for the emergencypower and natural gas that they’ve received during the currentcrisis, taxpayers nationwide could wind up footing the bill forbillions of dollars, warned Chairman Frank Murkowski (R-AK) of theSenate Energy and Natural Resources Committee yesterday.