Light

The August Nymex contract fell 3.4 cents to $2.389 on Monday,amid a day when an extremely light 22,000 estimated total contractschanged hands. “We went from 123,000 contracts on Friday to almostnothing today. There just ain’t nothing going on,” a traderlamented. The fourth-of-July is typically among the lowest demandperiods of the year, and because the holiday falls so close to thefirst of the month, many cash market traders termed up incrementalgas through July 7th during bidweek, several sources reported. As aresult, the Merc pit lacked solid participation from commercials,and a broker expects that to continue throughout the week.

A last-minute protest by Scana Energy Marketing to a requestedwaiver by Atlanta Gas Light to allow assignment of some of itsupstream pipeline capacity as part of the Georgia unbundling planmay have been a factor in derailing FERC action last week.

The July contract closed out the week on a positive note aslight short-covering and position squaring bolstered the market6.5-cents to settle at $2.035 on Friday. July was not the only bigwinner, with nearby August also coming to life. August was up 7.3cents bringing the 12-month strip to $2.329.

A road block to retail competition in Oklahoma was smashed lastweek when Oklahoma Governor Frank Keating vetoed Senate bill 565, alast-minute attempt to derail gas unbundling in the state. The billwould have pushed back the effective date for unbundling untilOctober 2001 and erased the final rules completed by the OklahomaCorporation Commission in April and approved by the legislature andthe governor.

NGC Corp. has replaced a combination of Vastar, Washington GasLight and Cook Inlet Energy Supply in managing the natural gassupply, transportation and storage for the City of Richmond, VA.

Atlanta Gas Light’s plea for limited waivers of FERC’scapacity-release regulations and other rules has drawn a howl ofprotests from producers. The Georgia-based LDC is seeking thewaivers to “facilitate” its application to unbundle itsdistribution services, which currently is pending before thestate’s Public Service Commission.

The June Nymex futures contract kicked up 2.0 cents to $2.169 onWednesday, amid a relatively light trading session and an extremelylimited three-cent trading range. Estimated volume came in at amere 43,390 contracts. “Trading was extremely orderly today,” abroker reported. “There was no real panic. Most of the volume wasEFPs and spreads today, with very little outright trading.” Hethinks part of the reason why speculative activity was limited isthat a satellite which transmits Nymex data to several vendors wasapparently down yesterday, and that prevented traders from gettingnecessary real-time price information.

Hot weather in the producing states of Louisiana and Texas,along with the futures screen’s rising example, set the tone forcash price hikes of 2-3 cents to almost a dime Monday. One tradersaid supplies seemed a bit tight in the Gulf Coast and Midcontinentfor some reason, allowing that it might have been southern coolingdemand soaking up available gas.

Lack of activity was the popular excuse for the mostly stagnantprice levels during Monday’s cash market trading session. Mostsources agreed that moderating temperatures along with aslow-moving Nymex screen were to blame. With the exception of theRockies and intra-Alberta gas, which registered the only notabledeclines of the day, cash prices generally started the new weekflat to up or down a penny or two across the board.