Holiday

After settling below $6 on two consecutive sessions prior to the long holiday weekend, March natural gas futures on Tuesday spent the first half of the day getting back to $6 and the second half exploring higher, settling at $6.103, up 19.5 cents. The April natural gas contract trumped that, closing 23.4 cents higher at $6.221.

While many pipelines had holiday weekend restrictions in place to deal with extra-cold weather, it was a different situation for Florida Gas Transmission. Saying market area temperatures were forecasted to be mild and linepack was higher, FGT issued an Underage Alert Day notice Thursday with 20% tolerance for positive daily imbalances.

Anxious to clear its agenda and get ready for a Holiday lull, the California Public Utilities Commission Thursday cranked out more than a half-dozen energy actions, including the acceleration of a critical power transmission line project, the continuation of a $125 million distributed generation incentive program, and the setting of 11%-plus returns-on-equity (ROEs) for the state’s two major utilities.

For the second time this week Pacific Gas and Electric displayed its holiday spirit doling out $85 million in property taxes to 49 California counties in which it has utility operations. They payments, made last Friday, represent the utility’s property taxes for the period covering the last six months of 2004.

Southern Natural began posting weekly storage data every Monday (or Tuesday if Monday is a holiday). Total working storage capacity on Southern’s system is 60 Bcf. As of the end of last Thursday, Sept. 2, estimated working storage inventory was about 53.6 Bcf, or 89% of capacity. At the same time last year, estimated working storage inventory was about 49.6 Bcf, or about 83% of capacity.

The most significant futures event during the relatively quiet holiday week was the continuing rise in gas futures on Thursday despite an unexpected 20 Bcf storage injection reported by the Energy Information Administration. After the May futures contract posted less than a one-cent change for both Monday and Tuesday, the contract found upward momentum on Wednesday and Thursday, settling up a little more than 6 cents each day.

With Passover beginning Tuesday and Good Friday acting as a book-end, claims that this week could be “quiet” held true Monday as the natural gas futures May contract tested the $5.9 level early, but used the rest of the session to meander downward, closing at $5.804, less than a cent lower than Friday’s close.

After dwelling in the mid $5.70s for most of the day, May futures were able to find some traction in afternoon trading, climbing up to a $5.83 high before settling at $5.809, up half a cent from Monday’s close. The second consecutive negligible day of trading came as little surprise to market-watchers, who had noted that trading this week was expected to be light due to religious holidays and spring break vacations (see Daily GPI, April 6). Volume on the day was 34,541.

In a discharge of pent-up selling that had welled up over the holiday weekend, natural gas futures tumbled lower Tuesday in sympathy with the latest round of bearish weather forecasts. Lower prices in the Monday-night Access trading session set the stage and the market responded by gapping lower when regular-outcry trading resumed Tuesday morning.