Finally

In a huge turnaround of the cash market spurred by the arrivalof weather that finally appeared more wintry than springlike,prices were skyrocketing Monday from the abyss into which they hadsunk prior to the weekend. To say that double-digit increasescharacterized trading was a gross understatement when many pointswere rising by 50-60 cents or more.

Vector Pipeline sponsors finally conceded last week their $471million project will not be prepared to ship a proposed 1 Bcf/d ofgas from Chicago to Dawn, ON, in November 1999 as planned. Theproject will be able to ship some gas along a short stretch of pipeat the downstream end between MichCon’s system and the Dawn hub,but about 340 miles of the system will remain out of service untilfall of 2000, sponsors told FERC.

After a four-year wait, Cincinnati Gas &amp Electric Co. and PSIResources finally received unconditional approval of their mergerinto Cinergy Corp. from the Securities and Exchange Commission. Afinal decision on the merger was held up by potential Congressionalaction on the Public Utility Holding Company Act.

With promises for the “de-carbonization of energy,” more stateinvolvement in Energy Department’s initiatives, and “help for ourown people-domestic oil and gas producers,” the new DOE SecretaryBill Richardson sparked a standing ovation from approximately 400attendees at the DOE-NARUC Natural Gas Conference in Pittsburghlast week.

Cash prices finally turned downward Thursday, a day later thanseveral sources had expected. Even with the futures screen staginga modest rally, cash traders were unable to ignore the previous twodays’ weakness in the Nymex pit, the continuing lack of weatherfundamentals and yet another bearish storage report that once againemphasised how close injection demand is getting to disappearing.

The $6.2 billion merger of Enova Corp. and Pacific Enterprisesfinally became official last week following approval of theSecurities and Exchange Commission. The merger creates SempraEnergy, a new San Diego-based Fortune 500 energy services holdingcompany with 12,000 employees, $10 billion in assets and thelargest regulated utility customer base in the nation.

After two years of hearings and oral arguments, FERC yesterdayfinally gave Granite State Gas Transmission the go-ahead to buildits controversial liquefied natural gas (LNG) project in the townof Wells, ME.

The dam supporting natural gas futures prices finally burstThursday. After successfully fighting back numerous attempts tofall below major support at $2.11 the last several weeks, the JuneNymex contract succumbed to major selling by funds yesterday, andsettled the day down 10.2 cents to $2.067. Volume was extremelyheavy, with an estimated 93,072 contracts changing hands.

Swelling open interest and large long positions held byspeculators finally caught up with the May Nymex contract onMonday, as the spot month torpedoed 17.8 cents lower to close theday at $2.479. In so doing, the contract easily broke below the uptrendline that was lending major support in the $2.51-53 area. “Ifeel like I’ve been kicked in the face,” one source said.