Gains

The cash market closed out last week on a somewhat balancednote, with new upticks of a nickel or more in the Northeast arrayedagainst drops between a nickel and a dime at western points. Inbetween there was a vast sea of mostly flatness.

Following the lead of an essentially flat screen during most ofthe cash trading period, the spot market leveled off Wednesday,with small upticks outweighing the few small declines. An Arcticcold front was moving eastward toward the Midwest and eventually tothe Northeast, making citygates tend to rise a bit more thanproduction-area points.

Feeding off gains notched during the Wednesday evening Accesssession, the futures market climbed higher yesterday as traderscovered shorts positions created during the recent dip. However,after failing to punch through resistance at $2.70 early, theNovember contract slipped in the afternoon before finishing at$2.642, a 4.1-cent advance on the day.

The November natural gas futures contract closed down 3.1 centsyesterday at $2.824 after trimming gains notched earlier in thesession. After a spirited sell-off in Tuesday’s Access trading, thenewly crowned prompt month erupted higher Wednesday to print a$2.94 high as buyers picked up contracts which they hope willrepresent bargains heading into the winter heating season. Byafternoon, however, the market banter had turned once again tobearish storage predictions and that pressured the market lower inlight trade.

The cash market turned in a decidedly mixed performance Monday.In general, quotes at many western points were up a nickel or so,while the East ranged from essentially flat to down as much as adime. A marketer had a simple explanation: “The West had a littlemore weather (cooling load) than the East did.” A screen drop of 2cents only had the barest negative influence on cash, sources said.

You could have got a nose bleed watching gas futures yesterday.A 1.5-cent gap higher to $2.700/MMBtu at the opening bell triggereda buying panic that sent October Henry Hub futures up 23.9 cents to$2.851. Estimated volume came in at a massive 116,601 contracts.

Fueled by the season’s first hurricane hype and gains tacked onduring the Wednesday evening Access trading session, natural gasfutures gapped higher for the second day in a row yesterday asshort-covering and fresh buying created a tempest of bullishtrading activity. That buying pressure continued throughout much ofthe session, allowing the September contract to notch a new high of$2.905 before finishing at $2.898, up 10.6 cents from Wednesday’sclose.

Cash prices built further Tuesday on their early-week gains invirtually every market except Northern California. Factors behindthe firmness remained much the same as on Monday: a moderate screenincrease, a “stash it while you can” storage mentality and agradual warming trend in northern market areas. Price movementranged from flat on several Rockies pipes to about a nickel higherat many Gulf Coast and Midcontinent points.

Northern Border Partners of Houston can thank its recentlycompleted expansion for significant gains in net income andthroughput on Northern Border Pipeline in the second quarter. Thecompany posted a 26% increase in second quarter net income to $20.6million. That compares to $16.4 million for the same period in1998. The increase is primarily attributable to the completion inDecember of Northern Border’s Chicago Project, which increasescapacity by more than 40% and plays a key role in gastransportation to the upper Midwest.