Monday

The futures market retraced advances tallied Monday and thensome yesterday as traders discounted the threat of Hurricane Mitch.Profit taking by all segments of the market was the feature of theday. Only the final bell could stop the price erosion that left theNovember contract down 19 cents to settle at $2.108.

The futures market spiked higher Monday in response to thethreat to natural gas supplies in the Gulf of Mexico posed byHurricane Mitch. There was an early buying surge as non-commericaltraders struggled to close out short positions ahead of the rally.However, once the market started its momentum, buying came from allsegments of the market. The November contract settled up 13.4 centsto $2.298.

The futures market followed an early example set by the cashmarket on Tuesday, as early selling fueled by losses in Monday’sAccess trading pushed the market lower for the second day in row.That enabled the November contract to not only gap lower at theopen, but also to gap below key support at $2.35 on its way to alow of $2.295. However, the buyers saw good value at those levelsand bid up the contract to its settle at $2.346, a 4.7 cent lossfor the day.

The futures market roared back to life on Monday, nearlyrecouping losses registered on Friday by trading 6.7 cents higherto settle at $1.945. Traders continued to cite a strong technicaloutlook coupled with increasingly bullish fundamental factors as areason for the advances.

Coming on the heels of a 315,000 Dth/d expansion of its mainlinesystem, Columbia Gulf Transmission announced Monday plans for twoseparate projects that would expand capacity by an additional 1.26Bcf/d. The projects, when combined with the Mainline ’99 expansion,would give Columbia Gulf shippers the capability for the firsttime to ship their Gulf of Mexico supplies directly to growingmarkets in the East, Northeast and Midwest, the pipeline said.

In the wild final hours of the California state legislature’s1998 session Monday (August 31), another bill aimed at curbing theleeway of the state energy regulators was passed (Senate Bill 1757)and is now awaiting the governor’s signature. A California PublicUtilities Commission representative at the state capitol said theregulators’ remain neutral on the bill, but may take a positionwhen they meet for a regularly scheduled commission conferenceThursday (Sept. 3).

Futures traders spent most of Monday in a “wait’n-see position”poised to react quickly if the market broke in either direction.However, no fresh news could be gleaned from yesterday’s market andas a result the market took what has become the path of leastresistance lately to move lower in quiet trade. The Septembercontract slipped 2.1 cents to $1.926.

Senate Energy Committee Chairman Frank Murkowski (R-AK) onMonday cleared Energy Secretary in-waiting Bill Richardson ofallegations that he may have misled Congress when testifying duringhis confirmation hearing last month about a job offer he made toformer White House intern Monica S. Lewinsky.

Hot weather appeared to be the primary driver of gas pricesMonday. When you’ve got it, as regions from the Rockies westwarddid, quotes went up by about a nickel at many points; when youdon’t have it, as the relatively balmy Midwest and Northeast marketareas didn’t, prices were flat to down as much as 7 cents.