Leads

Following the leads of Atlanta Gas Light and National Fuel,Baltimore Gas & Electric (BGE) last week requested a 17-monthwaiver of FERC’s “shipper-must-have-title” policy in order tomaintain gas supply reliability when its customer choice program isexpanded to all of its 540,000 residential customers in November.

The cash market was flat to a little higher Wednesday, and onceagain sources had little but the Henry Hub futures contract to citeas an influence. Most points were flat or just barely higher,however, with only a few coming close to matching the futures riseof over a nickel. The screen seems to be about the only thinghappening for cash, a Midcontinent trader said, “but it [screen] isnot running on fundamentals, just technicals.”

As many had expected, the cash market retreated slightlyThursday from the early May aftermarket peaks posted Wednesday. Thedecline was moderate with most points off anywhere from a penny ortwo to just over a nickel.

The investigation that led the Natural Gas Supply Association(NGSA), to accuse its president of misappropriating funds wassparked by a bill from the Internal Revenue Service, requiring aconsultant to pay taxes on income he never received for services henever provided to NGSA.

Adding to gains achieved during the Wednesday evening Accesstrading session, the futures market picked up momentum yesterdayamid moderate short-covering activity. The February contractfinished up 6.5 cents to $1.892 and in doing so not only settled inthe top half of its daily range, but also near the important $1.91resistance level.

Normally natural gas futures are influenced by a hodgepodge offactors: storage, technicals, support, resistance, supply anddemand. Of course last week was anything but normal as a hurricanewhich the market has not seen the likes of since Andrew, wasbearing down on the Gulf of Mexico leaving a wide swath ofdestruction in its wake. Now the question to be answered is whetherHurricane Georges (pronounced ZHORZH) will not only live in theminds of residents of Florida and the Carribean Islands, but alsoin the memories of natural gas traders. That was still a very murkyquestion as of Friday. One thing was becoming evident late lastweek: October’s expiration today will be anything but normal. But,despite the continued threat of storm, the October actually slipped0.2 cents to settle at $2.181 on Friday.

Positive contributions from gathering, processing andinternational activities helped boost El Paso Energy’s secondquarter earnings to $0.45/share, an increase of 22% from $0.37 in2Q97. Earnings before interest and taxes increased to $149 millionfrom $139 million in the year ago quarter.

A continuation of intense heat in the Eastern U.S. lentfundamental support to gas markets in the region Friday, keepingcash prices flat to slightly higher or lower for the weekend.Again, though, it was a case of “not so” in the San Juan Basin,Rockies and California. Although east-of-California markets sawhigh temperatures approaching or surpassing 100 degrees, a dearthof demand from the Golden State and the unrealized threat of an OFOon El Paso caused gas to back up into the San Juan-Blanco pool,resulting in a steep dive of nearly 30 cents. One source, whopicked up an early Blanco package at $1.78, about a dime down fromThursday, paid only $1.59 near the end of trading.

A combination of heat and cold served to keep cash prices on therise again Tuesday. Gains were fairly modest at a nickel or less inthe Gulf Coast, Midcontinent/Midwest and East Coast markets. Theywere primarily supported by continuing air conditioning load in theSouth.