Fails

The Federal Energy Regulatory Commission is likely to initiate a generic rulemaking addressing natural gas interchangeability and quality standards if industry sectors fail to achieve a consensus on these separate yet related issues, said Commissioner Suedeen Kelly last Tuesday.

The Federal Energy Regulatory Commission is likely to initiate a generic rulemaking addressing natural gas interchangeability and quality standards if industry sectors fail to achieve a consensus on these separate yet related issues, said Commissioner Suedeen Kelly Tuesday.

After dropping 5% Thursday in reaction to the overwhelmingly bearish storage news, the natural gas futures market rebounded Friday as traders covered shorts ahead of the weekend. Adding to the bullish euphoria over the expected chill over the weekend, traders were reticent to hold short positions for fear that the market would rally if another round of chilly forecasts were issued Monday morning.

The New York Mercantile Exchange Inc. (Nymex) reported its highest trading volume in its history in 2003 with the total of 139 million contracts, breaking the record of 134 million in 2002. But natural gas played a much smaller-than-expected role in that record-breaking performance.

The New York Mercantile Exchange Inc. (Nymex) reported its highest trading volume in its history in 2003 with the total of 139 million contracts, breaking the record of 134 million in 2002. But natural gas played a much smaller-than-expected role in that record-breaking performance.

The 30% increase in U.S. drilling activity since last year has failed to stop the steady decline of natural gas production, which should continue to fall “well into 2004,” Raymond James analysts said in their latest “Stat of the Week.”

For the second week in a row, natural gas futures shrugged off an undeniably bearish storage report. After dipping to $6.25 in the moments following the report of a record-setting 114 Bcf weekly storage injection, the July contract rebounded Thursday afternoon amid waves of short covering and speculative buying. The contract notched its highest close ever at $6.521, up 14.6 cents for the session and within striking distance of Wednesday’s $6.61 top.

El Paso Corp.’s Wyoming Interstate Company (WIC) said there is insufficient demand for it to move forward with its flow reversal and expansion project, which would have brought as much as 550,000 Dth/d of Powder River Basin production to Kanda, WY, and to Kern River Gas Transmission at the Opal Hub from the Cheyenne Hub in northern Colorado.

While a $630 million refinancing package on Friday is a step in the right direction for Aquila Inc., Standard and Poor’s said it’s certainly not enough to offset the significant asset sales risks and desperate cash flow needs of the company. S&P cut Aquila’s corporate credit rating Friday to “B” from “B+.” It assigned a “B+” rating to Aquila’s new three-year $430 million senior secured credit facility. Aquila got a one-year $200 million loan for its Australian subsidiary, UtiliCorp Australia Inc.