Favors

Friedman, Billings, Ramsey & Co. Inc. initiated coverage ofHS Resources with a “buy” rating and a 12-month price target of $30based on expectations for strong summer gas prices. In a 16-pageresearch report, FBR senior research analyst David Khani identifiedHS as the dominant oil and gas producer in the Denver-Julesberg(D-J) Basin.

A Williams Gas Pipeline executive last week departed from theinterstate pipeline industry’s general support for straight-fixedvariable (SFV) rate design, suggesting instead a move to avolumetric design. He believes such a rate design will be essentialfor gas pipelines to meet the needs of power generators, and forthe industry as a whole to reach its goal of a 30 Tcf market

After etching a $2.66 low early yesterday, the futures marketmoved higher on continued speculative buying pressure and bullishconcerns over today’s release of fresh storage data. The Septembercontract finished at $2.708, up 0.8 cents on the day.

The futures market continued higher Wednesday in another quiettrading session where local buying was too much for scale-up tradeselling. But despite its 2.6 cent advance to finish at $2.264, theJuly contract fell short of filling in the chart gap up to Friday’s$2.283 low. Estimated volume was a relatively light 56,980.

The futures market continued higher Friday, but it was notwithout a struggle when morning short-covering was followed by abrief, but spirited, long liquidation early in the afternoon.However, that dip in prices paved the way for another round of”bargain buying” as some fresh longs were seen entering the fray.And just as the case has been almost the entire week, it was bullsthat ended up on top Friday, with April finishing at $1.854, up 1.9cents for the day and 15.5 cents for the week.

The Energy Council has unanimously adopted a policy statementvoicing strident opposition to congressional restructuring measuresthat would mandate states to use a specific fuel mix in thegeneration of electric power. It also said it was against federallymandated targets for states to supply power from renewable energysources.