Four

The Energy Information Administration (EIA) is conducting asurvey of local distribution companies (LDCs) in four northeasternstates to determine the extent that interruptible natural gascontracts influenced home heating oil prices this winter.

What a difference a week can make. For the third time in fourdays the April futures contract tested, but was unable to breakbelow stubborn support in the $2.71-74 area, leaving traders littlechoice but to bid up futures despite warming temperatures andfalling cash prices. The April contract finished up an impressive5.3 cents at $2.847. This advance came on the heels of last week’sprice activity, which saw the April contract twice test equallystubborn resistance at the $2.88-90 level. Aside from one falsebreakout to $2.67, the spot contract has consolidated within the$2.70-90 area since March 1.

Williams and Utilicorp United continued their prosperousrelationship yesterday as the two companies announced a four-yeargas supply contract between Williams Gas Pipeline-Central and a 600MW power plant in Cass County, MO, that is 50% owned by Utlicorp.No financial terms were disclosed. Williams said gas is expected toflow in time for the testing phase of the plant in the early summerof 2001.

Energy East Corp. has announced the successful completion of itsmerger with Connecticut Energy Corp., the first of four New Englandutility acquisitions initiated by the New York-based company in1999.

Fueled by the East’s worst winter storm in four years, naturalgas futures erupted higher at the open yesterday as tradersestablished new longs with confidence.

Midcoast Interstate Transmission’s (MIT) four-year effort toblock construction of Southern Natural’s North Alabama Pipeline iscoming to a close as the line is poised to start flowing gas. The120-mile, 70 MMcf/d mainline extension is seen as a threat by MIT,which has enjoyed a monopoly over transportation in that region foryears.

Midcoast Interstate Transmission’s (MIT) four-year effort toblock construction of Southern Natural’s North Alabama Pipeline iscoming to a close as the line is poised to start flowing gas. The120-mile, 70 MMcf/d mainline extension is seen as a threat by MIT,which has enjoyed a monopoly over transportation in that region foryears.

Following a four-day, 45-cent price decline, bulls weresuccessful in stopping the bleeding yesterday as strong physicalprices gave way to an unexpected late short-covering rally. Cappingits tenure as prompt month in dramatic fashion, the Januarycontract expired yesterday at $2.344, up 7.3 cents on the day and ahalf-cent above where it debuted as spot month on Nov. 29.

As of today Sonat is extending application of an OFO Type 3 thattook effect Tuesday for four segments (see Daily GPI, Nov. 30) to the Birmingham Group and SouthMain Zone 3.