Despite a trend toward milder weather in virtually all regions,the great majority of the swing market was seeing flat to slightlyhigher prices Wednesday. Considering the weather and little supportfrom a moderately higher Nymex screen, it must have been cash-outprices that kept late-December quotes from continuing to fall, onesource suggested.
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EEI: Distributed Power, Kyoto A Boon to Gas
Distributed generation and mandates of the Kyoto protocol couldmean great things for gas demand and are reason enough to make theindustry super bullish, according to the Edison ElectricInstitute’s (EEI) Charles Linderman, director of fossil fuels,renewable energy and rail policy.
‘Deja Vu Again’: Flat, With a Slightly Softer Edge
A Houston marketer invoked the wisdom of baseball great YogiBerra to describe Tuesday’s cash market: “It’s deja vu all overagain.” In other words, it was like most of February’s previoustrading activity-generally flat with tight ranges. However, thoughthere was little if any change at any point, whatever changes didoccur were slightly to the downside. They were limited to 1-3 centsin all cases.
Coastal Has Great ’98, Others Not So Hot
While 1998 was a year of misery for most energy companies,especially producers, it was a banner year for The Coastal Corp.,which set a new earnings record. The company weathered the toughcommodity price environment so well in large part thanks to itsposition as a big gas transporter and large refiner, noted analystStuart Wagner of Petrie Parkman. Unlike Coastal, others reportingearnings yesterday suffered from not having a major pipelinebusiness to lean on for revenue.
Northeast Declines Conspicuous Amid Sea of Flatness
The great majority of the cash market elected to take it easyTuesday, yielding a lot of zeros, ones and twos in the averageprice change column. The only significant price drops of a dime ormore occurred at Northeast citygates, where temperatures abovefreezing were starting to reappear at some points. Transco Zone 6and Texas Eastern M-3 remain the only markets with a considerablecushion of more than a dime from January indexes.
Some See Powder River as ‘Gray Cloud’ Over Prices
During the great Rocky Mountain region price depression of theearly 90s, MMBtus were going for pocket change; producers werelucky to get a buck for an MMBtu. Today they are enjoying justunder two bucks. The average price for gas at Opal, WY, in 1998 was$1.81 slightly down from the ’97 boom year ($2.01/MMBtu) but stillin gravy-land. The Rockies have enjoyed two years of relativeprosperity, but some say “look out for what’s ahead.”
Pacific Northwest Primed For New Storage
The Pacific Northwest, historically a great corridor forshipping western Canadian natural gas to California’s burgeoningmarkets, is getting increasing attention for expansion ordevelopment of natural gas storage to fuel its own growth, whichhas averaged 5% annually in the 1990s. The region’s only twounderground storage facilities are in the midst of expansions, andenergy players within and outside the region are searching for newstorage prospects-under-and above-ground.
Cash Market Nearly Repeats Tuesday
Wednesday’s cash market was almost a carbon copy ofTuesday’s-flat to about a nickel higher at the great majority ofpoints but going lower in the Rockies. About the only differencewas in California numbers, which were flat to slightly higherWednesday instead of joining the Rockies in softening.
Bullish Futures Momentum Runs Out of Steam
The recent surge in natural gas futures prices became so greaton Monday that the spot April contract came within 4 cents ofreaching its all-time high trade of $2.460. However, speculatorswere quick to “pounce on a selling opportunity” at that price, theresult of which left April up just 0.8 cents for the day at $2.351.Total volume was estimated at 88,053 contracts.