Modest

With bankruptcy and California’s continuing market machinations an everyday preoccupation, PG&E Corp. seemed to take in stride the nation’s slowing economy and the growing industry concerns centered on Enron Corp.’s apparent implosion. The company’s senior officials said in their third-quarter earnings conference call with financial analysts last week that they see a dampening of demand, increased debt costs for nonutility operations and less opportunities to make big increases in energy trading.

Bullied by hot weather — both outside their windows, as well as in the latest forecasts — natural gas futures traders pressured prices off recent lows Monday and deposited the prompt month back above the psychologically important $3.00 level. At the closing bell, September had received the biggest boost of any contract, gaining 5.6 cents to close at $3.027.

Building on modest short-covering related advances achieved Friday, natural gas futures plowed higher yesterday as traders returned to the office to find that meteorologists had not backed away from their forecasts calling for hot temperatures across an extended area of the country over the next 10 days. With that, the September contract took over as the prompt month at Nymex with a neat, 15.9-cent gain to close at $3.353.

For the sixth time in seven trading sessions, natural gas futures advanced higher yesterday amid technical bullishness, and as traders continued to grapple with the possibility that the year-on-year storage deficit—currently at 404 Bcf—will be difficult to trim this summer when gas is in high demand for electricity generation. The May contract led all months Tuesday, finishing 8.2 cents stronger at $5.559.

Buoyed by cold weather expected to continue this week and comingon the heels of modest gains late last week, natural gas futuresshuffled higher late in the session Monday as traders took backearlier losses by pressing their long exposures. The April contractreceived the biggest buying boost, finishing 4.9 cents stronger at$5.322.

A casual observer of the natural gas futures market might lookat the narrow losses in the January contract and the modest gainsin the out months and conclude there was a quiet, post-expirationtrading lull in the Nymex pit Wednesday. December lost 8.5% of itsvalue in its last two trading days, and traders were just easinginto trading January, right? Wrong.

Despite snow in Calgary and modest disruptions of Gulf of Mexicosupplies by Tropical Storm Helene, nearly all points softened a bitThursday, with most of the declines less than a dime. Californianumbers took the biggest hits of more than 20 cents, while tradersof Canadian gas at Aeco, Sumas and Stanfield saw flat to slightlyhigher pricing.

Building on modest gains achieved yesterday morning, the futuresmarket rocketed more than 20 cents higher Wednesday afternoon uponthe release of yet another bullish storage report. Finishing 27.1cents stronger at $4.378, the prompt July contract retraced morethan half of its Monday price slide yesterday and now stands closerto the upper limit of its $3.80-$4.60 trading range.

Still a little hung over from Wednesday’s 24-cent bull-party,natural gas traders elected to cool their heels yesterday, leavingthe market to quietly check to either side of unchanged. The Junecontract finished at $3.71, up 2.1 cents on the day.