Natural Gas futures tumbled late in the trading session Tuesday,breaking momentarily below major support at $1.945, before settlingat $1.951. The nearly 15-cent slide exhibited by the Augustcontract comes on the heels of a nearly 3-week decline, leavingmany traders wondering if Tuesday’s big move lower was the end ofthe downtrend or one just picking up speed. Estimated volume of106,004 contracts favored the later.
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Weak oil prices were the bane of three major producers reportingsecond quarter earnings so far. Depressed crude prices were blamedfor second quarter and 1998 first half results significantly offfrom year-ago periods. At least one company said it may refigureE&P expenditures should the low prices persist. Gas prices alsowere off in most cases but less so than oil.
IPL Energy and MCN Energy took the last major regulatory step inadvancing their 1 Bcf/d Vector Pipeline project this week by filingan application with Canada’s National Energy Board forauthorization to construct the 16-mile Ontario portion of the342-mile line. An application for the larger U.S. portion was filedwith FERC in December.
Retail gas marketers won a major victory yesterday when aGeorgia Public Service Commission hearing officer ordered AtlantaGas Light’s unregulated marketing affiliate to “immediatelydiscontinue” the use of the name Atlanta Gas Light Services (AGLS)and stop referring to its heritage, reliability and trustworthinesswith respect to its affiliation with the state’s largest gasutility.
Encouraged by another skyrocketing screen, growing airconditioning load and a major supply outage in the Rockies, cashprices were on the rise Friday almost across the board by anywherefrom 2 to 18 cents. Most upticks were in the neighborhood of anickel, but all Rockies pipes were seeing double-digit increases.”I think a lot of people are starting to put their bull horns backon,” commented a Texas source.
The Maritimes & Northeast Pipeline project last week crossedanother major milestone on its way toward bringing gas toNortheastern markets from Atlantic Canada for the first time inNovember 1999. FERC issued a final environmental impact statementon the 200-mile U.S. upstream portion of the system, concluding itwould have limited adverse environmental impact with therecommended mitigation.
Gas gatherers and processors won a major victory when OklahomaGov. Frank Keating vetoed Senate Bill 319 last Friday. Thelegislation would have given the Oklahoma Corporation Commissionbroad authority to regulate rates, terms and conditions ofgathering and processing contracts and to settle disputes betweengatherers and producers.
Portland Natural Gas Transmission System (PNGTS) and Maritimes& Northeast Pipeline, L.L.C. (Maritimes) successfully crossedthe first major engineering hurdle in constructing their jointpipeline facilities, which represent the southernmost portion ofeach company’s pipeline system. The joint facilities eventuallywill bring more than 600 MMcf/d of Canadian gas to New Englandmarkets.
In the battle between marketers and LDCs to restructure the gasindustry, commercial customers are being overlooked, according toKathleen Magruder, vice president of rates and tariffs for EnronEnergy Services (EES). “I had a regulator. say to me, ‘Well, ‘I’venever heard a commercial customer say they really want somechoice.’ So the next meeting I brought in 15 commercial customers.He was real unhappy.