Finish

The Department of Energy (DOE) is putting the finishing touches on a national transmission grid study that, among other things, recognizes improved regional planning as a tool for removing transmission bottlenecks, Vicky Bailey, assistant secretary of energy for policy and international affairs at the DOE, told a gathering of electric utility executives last Wednesday at a transmission summit in Washington, DC.

After probing to new lows just after the opening bell, natural gas futures rebounded Monday morning as traders covered shorts initiated during the recent string of losses. However, no sooner had the February contract notched an impressive $2.35 high, than sellers were back at work, rescinding the morning’s advances. The prompt month spiraled lower into the close, finishing the day with a 0.3-cent decline at $2.272.

Spot prices Tuesday started soft, but came roaring back for a strong finish with many points posting double digit gains, in reaction to some relatively strong heating load. The Texas, Midcontinent and Midwest markets showed the greatest strength, while mild temperatures in California and the Southwest forced prices down slightly in the West. Prices in the Northeast rose modestly.

Despite forecasts calling for moderating temperatures this week, natural gas futures were higher Friday after traders were once again unsuccessful punching prices beneath what has become a very tough level of support in the $2.90-95 area. With that the September contract was treated to its highest closing price in more than a week, settling 8.4 cents higher at $3.04. Estimated volume was extremely weak, as only 40,115 contracts were estimated to have changed hands.

A bill that could force Texas electric utilities to start offering significant refunds to customers early next year passed a key Texas House panel earlier this month, but now faces a series of hurdles that it must clear before the current session of the Texas Legislature expires at the end of May. That’s a tight deadline, but one that could be met, a spokesperson for Texas-based TXU Electric told NGI.

Pressured by weakness in early morning over-the-counter trading,natural gas futures gapped lower on the open for the second sessionin a row Monday as traders were once again presented with a priceoutlook devoid of bullish fundamental news. However, unlike theprice action last Friday in which prices sifted lower throughoutthe day, yesterday’s market was constructive as prices workedhigher after finding support at the key $5.00 level. The Aprilcontract finished strongly, up 8.7 cents to close at $5.159.

In a trading session that rewarded the contrarian viewpoint,natural gas futures tumbled lower Wednesday afternoon after traderslearned that the market withdrew a larger-than-expected volume ofgas out of the ground last week. The March contract shuffled 55cents lower during the last 70 minutes of trading yesterday toclose at $5.707, off 39 cents for the day.

After tumbling to a new two-week low Tuesday, natural gasfutures roared back to life Thursday and Friday as traders wereforeced to cover their newly acquired short positions. With thatthe February contract was able to take back a dollar of lastTuesday’s record-breaking $1.411 sell-off, finishing the week at$9.261.

With little in the way of fresh news on either the technical orfundamental front, natural gas prices took the path of leastresistance yesterday, slipping lower but settling above key supportat $3.80. After plumbing its lowest point in two months at $3.79shortly after 2 p.m. (EST), the August contract finished stronglyto settle at $3.86, down 2.4 cents on the day.