Many

Many market prognosticators have realized recently that theirgas price projections are quite a bit too low for the rest of theyear because of declining gas wellhead deliverability, a reducedstorage surplus relative to last year and ever increasing gasdemand. The Energy Information Administration joined that crowdlast week, raising its wellhead price forecast for the fourthquarter 25 cents to $2.41/Mcf.

Many market prognosticators have realized recently that theirgas price projections are quite a bit too low for the rest of theyear because of declining gas wellhead deliverability, a reducedstorage surplus relative to last year and ever increasing gasdemand. The Energy Information Administration joined that crowdyesterday, concluding its wellhead price forecast for the fourthquarter was 25 cents too low. It raised it to $2.41/Mcf in its MayShort Term Energy Outlook.

Many industry analysts have been steadily raising their gasprice forecasts because of the year-long drilling slump and itspotential impact on gas deliverability, but St. Petersburg,FL-based Raymond James &amp Associates went out on a limb last weekpredicting sharp price spikes above $10/Mcf at the Henry Hub nextwinter and an average of $3/Mcf at the hub next year.

Many industry analysts have been steadily raising their gasprice forecasts because of the year-long drilling slump and itspotential impact on gas deliverability next winter, but St.Petersburg, FL-based Raymond James & Associates went out on alimb this week predicting sharp price spikes above $10/Mcf at theHenry Hub this winter and an average of $3/Mcf at the hub nextyear.

UtiliCorp joined the merger-mania Friday as it announced plans to acquire St. Joseph Light &Power in Missouri for $190.6 million. The agreement has been approved by the boards of directors for both companies but still needs approval from Light &Power shareholders and state and regulatory officials. Both companies expect the deal to close in 2000.

The cash market shrugged off what many considered a bearishstorage withdrawal report and maintained what has become February’sstatus quo Thursday: flat pricing with mostly tight ranges. Sourceswere dismayed to admit their general expectation Wednesdayafternoon of falling prices Thursday was off the mark. “Nothingseems to be moving this market in any direction,” a marketer in theWest said.

While many expected a bearish storage report (78 Bcf ofwithdrawals) to result in further declines in the March futurescontract on Thursday, the opposite took place. Borrowing a phrasefrom Federal Reserve Chairman Alan Greenspan, one trader said”irrational exuberance” took over at the New York MercantileExchange yesterday, which pushed the March contract up 6.4 cents tosettle at $1.829.

Unable to complete final agreements with many of its U.S.markets, Maritimes &amp Northeast Pipeline is expected to file anamended certificate application for Phase II of its pipelineproject with FERC this month that will defer construction of nearlyall of its previously planned pipeline laterals in the U.S. It alsois expected to show an increase in rates because of newcalculations of construction costs.

As many traders predicted, the futures market continued lowerThursday morning amid a swirl of bearish fundamental factors, whichwere freshly updated Wednesday evening. But the dip wasshort-lived, and afternoon buying bid the spot January contractback up to test resistance, before settling at $1.84, off 0.7 centsfor the day.