Mounting

From remote foothills of the Rocky Mountains to the outskirts of the Alberta capital of Edmonton, “unconventional” has become the watchword among Canadian producers mounting natural gas supply development programs.

Despite a lack of severe cold in most areas and mounting evidence that minuscule storage space remains for injections, most prices continued to advance Thursday. However, weakness in both the screen and physical fundamentals is expected to send the cash market lower Friday.

Gulf production shut-ins were mounting rapidly Tuesday but mild weather, more than adequate gas in storage and weak demand helped pushed gas prices lower at many locations outside the Gulf Coast region. Points in the Northeast were mixed with prices declines reaching as much as 15 cents at some points while there were small increases at others. Midcontinent, Western and Canadian prices fell 5-10 cents but Texas quotes were mixed.

In reaction to mounting bullish pressure and in agreement with its seasonal tendency to rally in October, the natural gas futures market soared Tuesday amid waves of managed fund short-covering.

Faced with mounting concerns from investors and credit-rating agencies, energy giant Williams Cos. announced a $3 billion-plus plan last Tuesday to improve the company’s flailing balance sheet over the next 12 months. However, Williams’ strategy drew mixed reactions from the major ratings’ agencies and failed to stem its stock losses.

Under mounting pressure from Capitol Hill, the Federal Energy Regulatory Commission last week kicked off an investigation into whether the once-powerful Enron Corp. manipulated wholesale electricity prices during the energy crisis that rocked California last year. If manipulation is found, FERC Chairman Pat Wood told a Senate committee that federal regulators or the courts could void some of the long-term forward contracts that the state signed to lock in supplies.

Under mounting pressure from Capitol Hill, the Federal Energy Regulatory Commission has kicked off an investigation into whether the once-powerful Enron Corp. manipulated long-term electricity prices during the energy crisis that rocked California last year. If manipulation is found, FERC Chairman Pat Wood earlier this week said federal regulators or the courts could void some of the long-term forward contracts that the state signed.

As Enron Corp.’s woes pulled other energy companies into the maelstrom last week, the company saw its problems escalate, learning that among other things, due diligence issues from the bankruptcy may complicate its anticipated sale of $800 million in assets that were already on the books. Enron began shedding other assets as well and also began to work with its creditors on a plan that Chairman Kenneth Lay hopes will put the company back on its feet within a year.

Mounting bearish fundamentals, including plummeting crude oil prices due to concerns about a potential recession, helped pull October natural gas futures down to a new all-time low for the October contract and to the lowest near-month price since November 1999. October ended the regular trading session down 12.3 cents to $2.102 with a low of $2.080 and a high of $2.190.