Local

Although the proposed project is focused primarily on newelectric generation and large industrial/wholesale localdistribution loads, the backers of a proposed 212-mile natural gaspipeline from the Arizona-California border south into northernBaja, Mexico are testing potential market interest for thepipeline’s U.S. segment as part of an open season running throughJuly 14.

The Energy Information Administration (EIA) is conducting asurvey of local distribution companies (LDCs) in four northeasternstates to determine the extent that interruptible natural gascontracts influenced home heating oil prices this winter.

Led by local buying, the natural gas futures market made twodistinctive thrusts higher Friday, as traders set their sights onresistance at $2.90. However it was not to be and after the secondsurge was thwarted shortly after noon (CST), the market tumbledlower amid light profit taking and position squaring. Oddly, theprompt month April suffered the smallest declines of any contract,slipping 1.1 cents to finish the week at $2.836. By comparison, theMay contract slipped 1.4 cents lower and the 12-month strip gaveback 1.5 cents. Estimated volume was moderate, with 69,063contracts changing hands.

The Coastal Corp.’s Colorado Interstate Gas Co. (CIG) istargeting a new power plant and local demand growth with a lateralto deliver gas along Colorado’s Front Range. The line would serve aplanned 478 MW power plant south of Colorado Springs.

Modest gains were seen in the natural gas pit yesterday after alocal-led sell-off was stymied by scale-down trade buying. Asidefrom cash prices moving a couple pennies higher, the fundamentalpicture remained overwhelmingly bearish, prompting traders to blametechnical factors for Thursday’s strength. The February contracttraded up 2.8 cents to $2.196 and March bounced 3.6 cents to$2.237. Equally as impressive was the 12-month strip, which gained2.6 cents to $2.391

Fresh off a two-day, 24-cent price drop, natural gas futurestraded unchanged for most of the session Tuesday with light buyingand selling by trade accounts matching up nearly perfectly. Bymid-afternoon, however, it looked as if bears would make it atrifecta, as they successfully etched new lows for the Januarycontract down to $2.21. But after remaining on the sidelines formost of the day, speculators were seen as aggressive buyers intothe final bell. That enabled the January contract to finish on apositive note, up 4.7-cents to $2.271.

Led by what one New York local trader called “massive shortcovering,” the futures market erupted 27.1 cents higher yesterdayin a rally that left many market participants incredulous. Comingon the heels of fresh storage data and subsequent gains in Accesstrading Wednesday, the October contract gapped higher at the openyesterday and never looked back, finishing at $2.697.

For the second day in a row the futures market probed to eitherside of unchanged yesterday as local traders attempted to influencethe market-first higher, then lower-in choppy, range-bound trading.But for the second day in a row they received little or no helpfrom other market participants, and thus were forced to cover intheir positions before the close. That enabled the October contractto drift quietly lower Monday, closing down 2 cents to $2.781.Estimated volume of 74,785 was well below Friday’s impressive114,000 figure.

A host of Wisconsin businesses, labor unions and state and localgovernment officials have rallied behind the proposed GuardianPipeline as their last, best hope of injecting natural gascompetition into the state. The coalition, which includes GovernorTommy Thompson, said the proposed 147-mile, $230 million interstatepipeline can create competition with ANR Pipeline, resulting inlower energy prices for consumers and increased reliability.