The July Nymex contract looked poised to build on gainsyesterday by opening strong then immediately testing resistance inthe $2.20-21 area. However, for the second day in a row resistanceheld, leading to profit taking that sent July spiraling down tosettle at $2.156, a 3.5-cent loss for the day.
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The cash market made more small gains Wednesday, but downturnsin late trading at many points led sources to believe this week’sprice rally has ended, at least for the time being. Prices ran up3-4 cents at the outset but then came off hard at the tail end inresponse to the screen, said a Gulf Coast trader. As long asfutures stayed up, though, cash stayed right there with them, headded.
Cash prices tended to make modest gains Thursday, with most ofthe strength concentrated at Texas points where significant airconditioning load is developing. Houston’s heat index shot up to102 degrees in the afternoon, said a local source. That caused ShipChannel numbers to rise a little over a nickel to the $2.20 area.Waha prices also benefited from the statewide heat and also roseslightly more than a nickel into the low $2.12s. However, late Wahaprices were tailing off slightly, a marketer said. The Texasheat-related upticks carried over into the Permian and San JuanBasins in a domino effect, another trader said.
Technically, you could call Tuesday’s price action at the NewYork Mercantile Exchange a rally. Not only because the spot Maycontract rose 9.2 cents to $2.561, but also because the marketmoved on strong technical buying. “Funds got back in the market ina big way,” a trader succinctly surmised, referring to an estimatedvolume figure which came in at more than 100,000 contractsyesterday.
The gas industry might very well see another trading point inthe Garden City discharge facility of the Nautilus Pipeline. “We’vegot just about everybody connected that we initially planned to.We’re in negotiations with Columbia, and we’re finishing upnegotiations with Koch and ANR,” Nautilus President Bill Hastingstold NGI. Connections with Koch and ANR are expected this summer.Columbia also should be on line this summer, he said. A total ofseven pipeline interconnects are completed or planned right now.Currently, Louisiana Intrastate Gas, Acadian, Texas Gas, andCypress are connected. Trunkline has expressed interest, andTennessee also is in the vicinity of Garden City. “Sonat is alsovery interested, but the distance is prohibitive at the moment, andwe’re trying to work with that,” Hastings said. Ultimately, theNautilus terminus could see as many as 10 interconnects. Hastingswould not disclose Nautilus’ current throughput. “We havecommitments in the deep-water. We expect to be very close to fullin 2001. He alluded to gas processing capabilities but would notdiscuss plans.
The cash market once again ignored spreading mild weatherWednesday and posted price gains that were most often around anickel. Although the central and northern Atlantic Coast regionswere still feeling some late-winter chill, most of the rest of thenation ranged from spring-like to somewhat summerish. So the pricestrength again derived from the screen, sources concluded. It onlyemphasises, one said, that “this market never really has been doingwhat the weather indicates it should this winter.”
Laclede Gas Co. and Williams agreed to provide additional gasservice into the St. Louis area through a project that will expandthe Williams Gas Pipelines Central service area eastward fromKansas City to the St. Louis area. The project involves conversionof an existing 200-mile Williams petroleum pipeline to gas service.Williams also will install new compression, pipeline and deliveryfacilities. The project is fully subscribed, and firm service isexpected to begin in the fourth quarter.
The dueling U.S. titans were continuing their battle to be thenew owner of England’s The Energy Group. Texas Utilities said itacquired 36.9 million more Energy Group shares at 840 pence/share,representing about 7.1% of The Energy Group’s issued share capital,and now holds 114.4 million shares, about 21.96% of issued sharecapital. TU had the blessing of U.S. regulators for the shareacquisition.
For the third day in a row the April Futures contract tested butwas unable to break through the $2.185 resistance level, stoppingshort at $2.172 Wednesday. April opened higher in sympathy withHenry Hub cash market prices, which eked out a couple-cent gain onthe day, but it was limited to a 4-cent trading range with arelatively light 31,462 contracts changing hands.