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FERC last week conditionally approved Reliant Energy GasTransmission’s proposal to allow shippers on its system to makemore liberal nominations.

FERC last week conditionally approved Reliant Energy GasTransmission’s proposal to allow shippers on its system to makemore liberal nominations.

What a difference a week can make when you are dealing with thevolatility of natural gas futures. As recently as last Friday whenprices carved out a $4.98 low, it appeared that bulls had turned intheir horns and donned their bear coats for the winter. And whynot? Storage injections were picking up, demand was light andtechnicals had turned negative. $4.50 here we come, right?

Continued strength prevailed for most of the cash marketyesterday as prices at many points made small gains of 2-5 centswith one major exception: California. Cooler temperatures andforecasts for continued cool weather reduced power demandsignificantly and spot prices for gas at the southern borderplummeted another 15 cents. San Juan prices lost another dime.

There was a feeding frenzy in the Gulf Coast region early onFriday, and we’re not talking about Hammerhead sharks. Tropicaldepression 11 triggered panic buying at the opening gate, sendingprices soaring 15-25 cents at most locations east of the Rockies.

What a difference a day can make in trader psychology. The newsof extra El Paso capacity and lack of a PG&E OFO causedCalifornia prices to plummet around a dollar or more in both theswing and bidweek markets Wednesday, while other quotes for thelast day of August were flat to mildly softer in the East andsurprisingly stronger in the Rockies.

What a difference a week can make. After watching helplessly asprices plumbed fresh two and a half months lows last Wednesday,bulls at Nymex were back at the helm yesterday and with the help ofa neutral to slightly bullish storage report were successfuldriving prices up 5.7%. The prompt month experienced it secondstraight advance of more than 20-cents, bubbling 22.7 cents higherto finish at $4.214.

The mergers of Columbia Energy and NiSource Inc. and El Paso Energy and Coastal Corp. breezed through the FERC review process last Wednesday, collecting seals of approval, at the same time the agency said it wanted to take another look at two proposed mergers of electric utilities.

FERC last week issued a final rulemaking that reinstates itsauthority to make well determinations so that qualifying producerscan obtain Section 29 tax credits for high-cost, hard-to-find gasproduced from certain wells and formations.