Natural

To say the weekly storage report has had an impact on thenatural gas futures market lately would be a gross understatement.Following an impressive 69 Bcf injection on Sept. 1, the futuresmarket dropped 26.6 cents the very next day. Then a week later,following the release of a relatively small 66 Bcf refill, themarket took a wild, 24-cent ride higher to close the session in themid-$2.80s. Now, a week later the question that everyone is askingis whether we will see another big move today. At first glance theanswer to that question was a resounding “yes” because shortlyafter the storage figures were released the October contracttumbled a dime lower in after-hours Access trading.

Aggregation of small retail natural gas customers is still alivein California, but barely. And it’s future is dim in the wake ofnew state legislation (AB 1421) passed earlier this month and nowon the governor’s desk. The legislation restricts unbundling in theretail core gas markets (see Daily GPI, Sept. 13).

Canada’s Far North was the scene Friday (Sept. 10) of anatural-gas industry version of the small step for man but giantleap for mankind on the moon 30 years ago.

Canada’s Far North was the scene Friday (Sept. 10) of anatural-gas industry version of the small step for man but giantleap for mankind on the moon 30 years ago.

Following a spectacular, 24-cent price spike Thursday, thenatural gas futures market cooled its heels Friday as traders tookprofits rather than spend the weekend long. That allowed theOctober contract to sift a nickel lower to $2.801 in an active114,602-volume session.

Pioneer Natural Resources USA Inc. filed a preliminary proxystatement with the SEC regarding a proposed merger with the limitedpartners of 25 publicly-held Parker & Parsley limitedpartnerships. According to the plan, each partnership that approvesthe proposals will merge with Pioneer and their partnershipinterests will be converted into the right to receive cash. At thesame time, Pioneer also is offering to acquire 21 non-publiclimited partnerships and 13 privately-held employee partnershipsthrough mergers for cash. Pioneer is the sole or managing generalpartner of all of the partnerships. As a result of the mergers,Pioneer will acquire additional working interests in wellspredominantly located in the Spraberry field in the Permian Basinof West Texas. If approved, the mergers are expected to add twomillion barrels of oil equivalent production next year. The amountof cash Pioneer USA will pay for the partnership interests will bebased on the partnerships’ reserve value plus net working capital(less expenses and fees of the mergers) as of Sept. 30. Undercurrent Nymex futures strip prices, Pioneer estimates that its cashoffer would be $60 million. However, it also said it will consideroffers from third parties to purchase any partnership or itsassets. Persons interested in making an offer should contactTimothy L. Dove or Mark L. Withrow at (972) 444-9001 before Nov. 1.

Fresh from a gargantuan six-day, 72-cent price retreat, thenatural gas futures market regained its composure Friday, asscale-down buyers took advantage of lower prices, and new shortscovered positions into the holiday weekend. The October contractclosed up 9 cents at $2.561 in an abbreviated pre-holiday session.

CMS Energy moved a step closer to its liquefied natural gas(LNG) goals last week as its energy marketing arm, CMS Marketing,Services and Trading, (CMS-MST) purchased three LNG shipments fromRas Laffin LNG Co. Limited (Rasgas) in Qatar. The three cargoes,carrying a combined 8.1 Bcf, will be delivered in November andDecember of this year and in February of 2000 to CMS’ LNG complexin Lake Charles, LA, then fed into CMS Trunkline’s interstatepipeline system. The overall cost for the shipments was notreleased.

The mid-$2.60s have been a pivotal level for natural gas futuresover the past year. Last November, the December contract managed totrade up to $2.64 — the high price during the “winter thatwasn’t” — before crashing more than a dollar to February lows.Then in July, many market watchers pointed to the August’s abilityto clear the $2.60 level as a harbinger of things to come. OnWednesday once again a line was drawn in the sand at the $2.65level. If the market stays above that level, we can retest thehighs, bull traders insisted. But a settlement below that levelcould spawn a round of selling, countered market bears.