Prices for the last day of February were mostly softer Friday,but quotes for the Southwest basins, Rockies and intra-Albertareflected flatness. And Canadian exports into Northwest at Sumas,which had been languishing in the low to mid $1.10s at the start ofthe week, climbed to the $1.30 area. The big exception to Westernfirmness was a fall of about a dime at the Southern Californiaborder in wide-ranging numbers.
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April Futures Reach Resistance, Then Fall Back
The April Nymex contract gained 3.7 cents to settle Friday at$2.321, thanks to what one broker called strong fund buying.However, April may be hard pressed to add much more to that.According to the latest Commitments of Traders report,non-commercials extended their net long position by 7,649 contractsto 9,543 during the last two weeks. The broker estimates that 60%of those positions are in April, which would mean these speculatorswould have to wind out of approximately 5,700 April contractswithin the next four weeks. However, if April breaks out of itsrecent technical trading range within the next several days, it islikely funds will add to their overall long position, meaning moreselling pressure would mount on April and May as we approach theApril expiration, a source argued.
Hearings Begin on New Nova By-pass
The next challenge to the troubled Canadian natural gas pipelineestablishment opens May 25, when the National Energy Board hasscheduled the start for hearings on AEC Suffield Gas Pipeline.
Tennessee’s Express 500 Project Breaks a Billion
Tennessee Gas Pipeline’s Express 500 Project, which offers firmtransportation through the bottlenecked Gulf of Mexico supply area,won more than 1 Bcf/d of capacity requests from customers duringthe project’s first open season. “We believe that this level ofparticipation demonstrates the need for incremental capacity fromthe Gulf Coast,” said Tennessee President John Somerhalder II.
Consumers Expands Retail Program
Consumers Energy will expand its “Gas Customer Choice” retailprogram this April to 100,000 customers state-wide in Michigan,following a one-year pilot that allowed 500 customers in Bay Countyto pick another natural gas supplier. In all, 300,000 customerswill be given a choice of suppliers over the next three years.
Westinghouse Launches Fuel Cell
Westinghouse reported last week that it had just built thelargest solid-oxide fuel cell (SOFC) generating system for a Dutchenergy distribution utility. The system, which runs on natural gas,is delivering 106 KW to the electric grid plus 80 KW of thermalpower to the area’s district heating system, according to thecompany. The unit is the first to integrate a natural gas reformerwithin the SOFC stack.
Industry Briefs
ONEOK Resources has signed a definitive agreement with OXY USAto purchase some of its natural gas and oil reserves including morethan 400 wells in Oklahoma and Kansas outside the Hugoton field forapproximately $135 million before adjustments. Net production isapproximately 30 MMcf/d and 400 b/d. The properties havelower-risk development potential for increased reserves. WhileONEOK’s previous reserve acquisitions have been concentrated inOklahoma, this purchase includes significant reserves in Kansaswhere ONEOK recently acquired Kansas Gas Service, an LDC servingtwo-thirds of the state. David Kyle, president and chief operatingofficer of ONEOK, Inc., said the acquisition will almost doubleONEOK’s oil and gas reserve base. The acquisition includes a gassweetening plant located in the Aledo Field in Oklahoma.
Prices for February and March Still on the Rise
Prices continued to rise Thursday in trading for both lateFebruary and March. It was mostly a response to the screen’sbelated run-up Wednesday, sources said, but there was enoughblizzard-like weather spreading out from the Upper Plains region togive prices a little extra boost.
April Futures Follow March Cash Prices Lower
The April Nymex contract got off to a fast start Thursday byopening at $2.32 and quickly moving to $2.34. However, strongtechnical selling kicked in at that point, so much so that Aprilslid back to settle the day down 3.4 cents at $2.284.
Halliburton, Dresser Industries in $7.7 Billion Merger
Halliburton Co. and Dresser Industries announced a $7.7 billionmerger agreement yesterday that will create the world’s largestdrilling and energy engineering company with combined 1997 revenuesof $16 billion and combined market capitalization of over $19billion. The firm, which will retain the Halliburton name will have100,000 employees worldwide. It will be based in Dallas, TX.