Finished

Buoyed by gains achieved in the overnight Access tradingsession, natural gas futures finished on a positive note Friday, asshort covering took back a small percentage of last week’s massivelosses. The February contract led the way, rumbling 32.3 centshigher to close at $7.459. Meanwhile, the out months were muchquieter with smaller gains in March, April and May almost offsetby modest losses in the rest of the strip.

Duke Energy Field Services (DEFS) finished off 2000 with a bangby completing three year-end asset transactions. First, the companyfinalized the $91 million sale of natural gas liquid (NGL) pipelineassets to TEPPCO Crude Pipeline, L.P., then it completed thepurchase of certain natural gas pipeline assets from El Paso FieldServices in two separate deals for an undisclosed sum.

In another topsy-turvy trading session, natural gas futuresfinished well off daily highs, but still in positive territoryyesterday as players bid up the market in the morning only to dumpit lower after fresh storage data was released. The Januarycontract traded within a wide, 50-cent range and closed 22.4 centsstronger at $9.326. Most of the out-months were much more staid,with May through December 2001 contracts only able to tack on a1.5-cent gain. Illiquid trading contributed to the volatility asless than 45,175 contracts changed hands.

Natural gas futures finished the week on a strong note Friday astraders reacted to an unconfirmed (and later retracted) news reportthat the American Gas Association (AGA) had overestimated theamount of working gas in underground storage facilities. Aftergapping higher on the open, the December contract shuffled higherthroughout much of the session, closing 17.1 cents higher at$4.931.

Despite a strong showing early in the trading session, naturalgas futures finished lower yesterday as traders grappled withcontinued low seasonal heating demand and an increasingly negativetechnical picture. At the closing bell, the newly crowned spotmonth December was 16.7 cents lower at $4.485, its lowest pricesince mid-August.

A unit of Williams’ energy services business finished expandinga gas plant in Opal, WY, that boosts cryogenic processing capacityto 735 MMcf/d and gas liquids extraction capacity to 43,000 b/d. Athird cryogenic processing train was added, two existing cryogenictrains were modified, and control systems and field compressionwere enhanced. Total costs exceeded $60 million.

Feeding off Wednesday’s strong close, natural gas futures spikedhigher yesterday morning, but ultimately finished lower in anextremely quiet session. After notching a new life of contract highat $2.90 shortly before noon (EST), April was hit with light profittaking which demoted the contract to $2.851, a 1.5-cent loss forthe session.

Natural gas futures finished on a sour note Wednesday as tradersalleviated overbought conditions and took profits both before andafter the release of fresh storage data. After opening lower, theApril contract worked its way down throughout much of the sessionbefore tumbling at the closing bell to finish at $2.71. The promptmonth’s 8.9-cent decline was trumped only by the May contract,which dropped 9 cents to finish as $2.747. Estimated volume wasmodest with only 63,810 contracts changing hands.

Cash prices finished the week on a positive note as continuedincremental heating demand and a strong futures market bolsteredprices Friday. Trading was very active from the outset, a Gulftrader told Daily GPI. “There were some undeniable factors pointingto higher cash prices. Overnight gains in Access trading set thetone, then the over the counter market verified the strength,” heexplained. So it came as no surprise when the first cash offerswere a nickel or more above Thursday’s averages. But the marketcould not sustain the price rally and after buyers had filled theirrequirements at around 9:45 CST, seller realized their lowestprices of the day in late morning dealings.