Mood

Higher Over-the-Counter Access pricing, combined with stronger cash market levels set the tone at the New York Mercantile Exchange early yesterday, and bull traders did not waste the opportunity to pressure the natural gas market higher. After gapping up 6.5 at the opening bell, the April contract tested recent highs at the $2.50-51 mark before closing with a 12.9-cent advance on the day at $2.488.

The mood around Enron Corp.’s Houston headquarters Monday was resolve as much as anything else, as thousands of employees prepared for the inevitable pink slips following the weekend Chapter 11 bankruptcy filing by what was the world’s leading energy trader just a few weeks ago. With almost 21,000 employees worldwide, Houston’s offices will take the largest hit, with more than 4,000 of the 7,500 employees expecting to be let go this week.

The cash market maintained Tuesday the generally somber mood that has prevailed since last week’s terrorist attacks, although sources continued to report small progress here and there towards a return to “normal” trading. Bullish factors were in scant supply, so prices softened at virtually all points except at the PG&E citygate.

Houston’s Apache Corp. remains in an acquiring mood, agreeinglast week to buy Occidental Petroleum Corp.’s offshore oil and gasinterests in the Gulf of Mexico for $385 million. The deal callsfor Apache to pay Occidental $341 million for the properties thisyear, then pay $11 million a year for the next four years. Closingis expected by mid-August.

Houston’s Apache Corp. remains in an acquiring mood, agreeing yesterday to buy Occidental Petroleum Corp.’s offshore oil and gas interests in the Gulf of Mexico for $385 million. The deal calls for Apache to pay Occidental $341 million for the properties this year, then pay $11 million a year for the next four years. Closing is expected by mid-August.

Fueled by the East’s worst winter storm in four years, naturalgas futures erupted higher at the open yesterday as tradersestablished new longs with confidence.

If you don’t like the weather, wait a minute. And that’s exactlywhat the natural gas market will be doing this week followingforecasts calling for the coldest weather of the season togradually move south from Canada over the next couple of days. Buttraders weren’t waiting last Friday as they aggressively coveredshorts and initiated fresh longs in bullish anticipation of thefalling mercury. After gapping up at the open, the January spikedhigher Friday to finish at $2.446, a 16.1-cent advance for the day.

Y2K was not an issue yesterday for traders in the natural gaspit at the New York Mercantile Exchange as they seamlessly made theswitch from the December 1999 contract to the January 2000contract. They did, however, have some unfinished business to takecare of. After opening at $2.33, January rumbled 9 cents higher tofill in the chart gap created by December, between the Nov. 19 lowof $2.39 and the Nov. 22 high of $2.35. But before any talk of asustained rally could circulate-bears, armed with fresh forecastscalling for above-normal temperatures-were successful in all butcompletely erasing those early morning gains. At the closing bellthe January contract was up just 2.2 cents to finish at $2.352.

Maybe it was because it was Thanksgiving, but FERC was in a veryunderstanding mood last week. It agreed Natural Gas Pipeline Co.of America (NGPL) had failed to justify the need for a proposedtariff change that would hold a “party tendering gas” liable forpipeline facility damages that are caused by lower-quality gasentering NGPL’s system. The Commission, however, didn’t reject theproposal.