Likely

The current crisis in the energy trading market largely will have blown over by the time 2003 rolls around, predicted John Olson Wednesday. He is probably best known as the industry analyst who suspected something was rotten in the state of Enron well before anyone else, earning himself an unfavorable reputation in the Enron executive suite prior to the company’s collapse.

The current “trough” hanging over the power sector is likely to stretch three to five years and a key factor in determining just how long the industry will be stuck in its current funk will depend, at least in part, on how many forecasted gigawatts actually come online over the next couple of years, said Thomas Boren, executive vice president at PG&E National Energy Group (NEG).

Jurors deliberating for the ninth day in Arthur Andersen LLP’s obstruction of justice trial were awaiting a ruling by the presiding Houston judge Friday afternoon that may offer crucial guidance in determining a decision of guilt or innocence. Judge Melinda Harmon was asked by the jurors to rule on whether they all must agree on which individual at Andersen acted corruptly when the firm destroyed Enron Corp. records last fall.

Gas industry consultant Benjamin Schlesinger, president of Maryland-based Schlesinger and Associates, believes that federal regulators may require all natural gas companies to begin reporting their transactions to FERC in a way similar to what electric companies already do on a quarterly basis. Schlesinger, a 30-year gas industry veteran and former vice president at the American Gas Association, said in an interview that he wouldn’t be surprised at all if FERC issued a notice of proposed rulemaking on the matter sometime between now and December.

Despite the recent run-up in natural gas prices, the U.S. Energy Department believes a shift to the downside is likely because of excess storage, more than adequate production capacity and only a moderate increase in demand. The downturn will come “once the summer season starts and the weakness of (storage) injection-related wellhead demand becomes more apparent,” according to the Short-Term Energy Outlook issued last week.

Although this week’s winter siege likely was reaching its maximum area of penetration Wednesday, for the most part it had lost much of its price-boosting power. Except for big advances by Florida citygates and some citygates in the Northeast, the rest of the cash market had settled down for a generally flat performance, with scattered points showing 1 to 5 cent increases.

A decline in global and industrial demand for oil and natural gas is likely to drive commodity prices lower and keep them there for the near to intermediate term, according to an article in the latest edition of the Oil & Gas Insights newsletter from Fitch. As a result, the rating agency has lowered its price deck for oil and gas to $19.50 and $2.15, respectively, for 2002.

A decline in global and industrial demand for oil and natural gas is likely to drive commodity prices lower and keep them there for the near to intermediate term, according to an article in the latest edition of the ‘Oil & Gas Insights’ newsletter from Fitch. As a result, the rating agency has lowered its price deck for oil and gas to $19.50 and $2.15, respectively, for 2002.

What several sources believe may be an extended period of slow, often featureless and softer cash trading was launched Tuesday with all points on the same falling price page. Trends were more consistent across the entire market, with a large majority of points registering declines from a little less than a dime to about 15 cents. More modest drops tended to occur in non-Permian Basin western markets, while larger losses were recorded in the Northeast.