Inevitable

The July Fourth holiday only delayed by a day the inevitable whiplash that gas futures typically cause on Wednesdays. Thursday opened with bang as August futures gapped about 8 cents higher at the opening bell, but the contract proceeded to do a nosedive in anticipation of another large storage refill. When the American Gas Association reported the ninth 100+ Bcf storage injection in 10 weeks (105 Bcf), futures plummeted to a new low of $3.040. However, the contract encountered surprising support there and managed to rebound to $3.136, down only 6.5 cents for the day.

Storm hype or not? It was inevitable that debate on the subjectwould break out again Wednesday after Tropical Storm Irene formedin the northwest Caribbean Sea and cash prices saw this week’suphill climb get even steeper. Virtually all points were rising by15 cents or more, led by New England citygate (Tennessee Zone 6 andAlgonquin) upticks of around a quarter.

In October AGL Resources will become the first gas utility in the U.S. to completely exit the gas merchant function, but its transformation is far from over, AGL CEO Walter Higgins said last week. Higgins expects his company to be snatched up like the first pie out of the oven, probably by some hungry electric firm eager to get its hands on a utility that has emerged from deregulation relatively well done.

In October AGL Resources will become the first gas utility inthe U.S. to completely exit the gas merchant function, but itstransformation is far from over, AGL CEO Walter Higgins saidyesterday. Higgins expects his company to be snatched up like thefirst pie out of the oven, probably by some hungry electric firmeager to get its hands on a utility that has emerged fromderegulation relatively well done.

If pipeline and LDC rates continue their upward climb, the”inevitable result” will be a sharp decline in producers’ wellheadrevenues and a subsequent “significant loss” of natural gassupplies, an official of a major producer group said Monday.