Demonstrating the growing popularity of weather derivatives,Kansas Gas Service is on the brink of offering a weather-proof billto all 600,000 of its customers, said Steve Johnson, executivedirector of corporate relations for the LDC. Johnson and a panel ofweather derivative experts spoke on the growing use of weatherproducts at Gasmart/Power’99 in Dallas yesterday.
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Distributed generation and mandates of the Kyoto protocol couldmean great things for gas demand and are reason enough to make theindustry super bullish, according to the Edison ElectricInstitute’s (EEI) Charles Linderman, director of fossil fuels,renewable energy and rail policy.
For the second day in a row, the futures market raced off to afast start as steady buying bolstered prices to their highest marksince December. But in contrast to Tuesday’s price action, whichfeatured the May contract finishing near its daily high,Wednesday’s rally ran into heavy overhead selling that trimmedthose gains into the close. May finished up 3.5 cents to $2.013,after notching a $2.07 high.
What a difference a week can make. Bull traders, nearly ready tothrow in the towel a week ago, have become “cautiously optimistic”higher prices are in their future. And they have good reason tofeel that way because the market entertained a flood of positivenews last week, which gave bulls and bears alike little choice butto bid the market higher. The April contract broke above the 40-daymoving average at $1.80 on Friday and was propelled 5 cents higherby speculative fund buying to finish the day up 9.8 cents at$1.853. Volume was a heavy 108,348. For the week, April gained 22.5cents.
“It just goes to show you. This gas market doesn’t make muchsense,” a marketer said. Her comment reflected the chagrin of manytraders Thursday when late-January cash prices tended to firm by upto a nickel instead of falling as generally expected. Most sourceshad been sure Wednesday that the anemic storage withdrawal figurereported by AGA (92 Bcf) would lead to cash softness. Sourcesprofessed to have no clue as to what was propping up prices in theface of no fundamental support, although one suggested the strongFebruary futures close might have given cash a psychological boost.
Portland Natural Gas Transmission System isn’t going to make itssecond start-up deadline this month, but officials are promising tobe in service in early February. The pipeline originally expected152 MMcf/d of Canadian gas would begin flowing to New Englandmarkets last November.
The four major gas trade associations that make up the NaturalGas Council (NGC) and two other industry trade groups were expectedto ask FERC late Monday for a second extension of the deadline forindustry comments on the major notice of proposed rulemaking (NOPR)and notice of inquiry (NOI) issued in July, industry sources said[RM98-10, RM98-12].