Firmly

Keeping May natural gas futures firmly centered around the psychological $7 figure, natural gas traders on Tuesday pushed the prompt month higher, only to be repelled by resistance at $7.09 for the second consecutive session.

Besieged by a deteriorating fundamental picture in a market that is already firmly entrenched in a downtrend, natural gas futures traders pressured prices to new lows yesterday, amid a seemingly relentless barrage of selling activity. Even the season’s first triple-digit storage withdrawal (124 Bcf) failed to induce much of any buying sympathy, giving traders little choice but to continue to short the market. The February contract closed 19.7 cents lower at $2.268 and in doing so broke its previous all-time low at $2.415 notched back in February 1999.

Coming down firmly on the side of generators in California’s ongoing energy wars, FERC last Wednesday ordered the California Independent System Operator (Cal-ISO) to enforce the creditworthiness requirement of its open access tariff and previous orders issued by the Commission within 15 days. The Commission said that it was taking this step in order to ensure timely payment of Cal-ISO’s energy suppliers.

The October aftermarket was dividing along geographical lines as it began Friday. Eastern points fell off sharply from both first-of-month indexes and end-of-September levels. However, except for mild Permian/Waha softness, the West was realizing gains in both of the aforementioned cases. Sources attributed the relative western firmness largely to the region’s having a near-monopoly on any hot weather remaining in the U.S.

California’s anti-bypass policy would remain firmly in place on Southern California Gas’ system under a peaking service proposed by SoCal that was approved last week by a California Public Utilities Commission (CPUC) judge (see NGI, June 4), according to the sponsor of a prospective pipeline.

California’s anti-bypass policy would remain firmly in place on Southern California Gas’ system under a peaking service proposed by SoCal that was approved last week by a California Public Utilities Commission (CPUC) judge (see Daily GPI, June 4), according to the sponsor of a prospective pipeline.

In the near-term, gas prices could easily drop below $4/MMBtu because of the rapid rise in storage levels this spring. But summer prices likely will spike above $6 and the long-term forecast is that prices will average between $4 and $5, said Robert Morris of Salomon Smith Barney yesterday at NGI’s GasMart/Power in Tampa. However, Morris doesn’t expected recurring winter peaks above $10/MMBtu.

With the North American Free Trade Agreement (NAFTA) as well as the Canada/United States Free Trade Agreement firmly in place, Canadian producers said North America as a whole must come together and continue to work toward a reliable supply of gas and oil to quench the appetite of the North American energy markets. It is critical, they said, that Canada and the United States develop additional global strategies to address energy production and consumption, especially with the constantly growing interdependence of the countries’ economies.

With the North American Free Trade Agreement (NAFTA) as well as the Canada/United States Free Trade Agreement firmly in place, Canadian producers said North America as a whole must come together and continue to work toward a reliable supply of gas and oil to quench the appetite of the North American energy markets. It is critical they said, that Canada and the United States develop additional global strategies to address energy production and consumption, especially with the constantly growing interdependence of the countries’ economies.