Fears

Expected rises in gas demand, a relatively slow storage buildup,strong crude oil prices and fears of a repeat of last summer’s heatwave in key gas-consuming areas will pave the way for unprecedentednatural gas prices for the rest of the year, the Energy InformationAdministration (EIA) said in its short-term energy outlook forJune.

Expected rises in gas demand, a relatively slow storage buildup,strong crude oil prices and fears of a repeat of last summer’s heatwave in key gas-consuming areas will pave the way for unprecedentednatural gas prices for the rest of the year, the Energy InformationAdministration (EIA) said in its short-term energy outlook forJune.

Natural Gas Pipeline Co. of America (NGPL) fears that corrective action ordered by FERC with respect to its auction practices, if construed improperly, could boomerang and potentially “nullify” the pipeline’s negotiated-rate authority and “aggravate” its decontracting problems.

FERC has decided to give Atlanta Gas Light (AGL) a short-termextension of waivers to Commission regulations to preserve the”status quo” of natural gas unbundling in the state while itexplores other non-waiver options for utilities.

Bombing Iraq seemed as reasonable an explanation as any for whymost cash markets were rising in the neighborhood of a dimeWednesday. Weather was getting a little colder but still relativelymild for this time of year, so it’s not like there’s any big surgein gas demand, a marketer said. The AGA storage report of 49 Bcf inwithdrawals last week, which came too late to affect Wednesday’strading, was approximately in the middle of most expectations andthus neither bearish nor bullish.

El Paso’s Bondad System in the San Juan Basin is constrained tothe point that some gas traders mockingly refer to it as “Bondage.”Anything to ease the constriction ought to be welcomed with openarms by those who deal with that point, right? Yet the pipeline’sBondad Expansion project, aimed at adding 116.5 MMcf/d to thesystem’s current capacity of about 567.7 MMcf/d, is in danger offailing because FERC feels the three shippers paying all of theproject’s costs should share their expansion space withnonparticipants.

The futures market came under hefty selling pressure right fromthe outset Tuesday, as the market put aside hurricane fears toconcentrate on the overall bearish outlook for natural gas. TheSeptember contract sustained the largest losses, slipping 9.8 centsto settle at $1.828 for the day.