Normal

Trading in El Paso Energy stock was nearly triple normalactivity Friday, thanks to a rumor the company was acquiring SonatInc. Sonat share trading was more than five times the usual volumeas well. Friday El Paso closed down 2 15/16 at 35 _. Sonat closedup 3 1/16 at 30 3/16. El Paso’s 52-week range is 24 11/16 to 393/8, and Sonat’s 52-week range is 23 9/16 to 45.

Despite a disappointing storage report and continuedabove-normal temperatures across the country, natural gas futuresbubbled higher yesterday as technical traders found good value inprices near the bottom end of the recent trading range. And byadvancing 6.2 cents to settle at $1.837, the March contract notonly washed clean Wednesday’s declines but also positioned itselfback in the middle of the $1.725-925 trading range. Estimatedvolume was a somewhat lackluster 61,716 contracts.

Despite much-above- normal temperatures across much of the U.S.,natural gas squeezed out small gains at the New York MercantileExchange yesterday in a mostly dull trading session. Throughoutmost of the day the March contract looked as if it would closeunchanged, but a late rally put a positive spin on the day’sevents, nudging the prompt month 2 cents higher to finish at$1.838. Estimated volume, registering a measly 37,697 contracts,confirmed the sluggish nature of the market.

Above-normal temperatures, both outside traders’ windows and intheir weather forecasts, continued to weigh on the futures marketthroughout trading Monday. The February contract gapped lower atthe open as moderate selling prompted the market down 6.4 cents toits $1.714 close. Estimated volume was heavy, with more than 93,000contracts changing hands.

A return to normal temperatures in the first quarter andthroughout next year is likely to lead to a 2.4% increase in gasdemand in 1999, the Independent Petroleum Association of America(IPAA) said in its November Short-Run Forecast. IPAA sees demandreaching 22.3 Tcf, a peak that surpasses the previous high of 22.1set in 1972 and a significant turnaround from the 1.1% decrease to21.7 Tcf of gas demand expected this year.

Given mild weather, bearish storage levels and the normal slumpin weekend demand, many traders were surprised Friday to see nearlyall Eastern points stay flat or go up as much as 3-4 cents. ThoughGulf Coast numbers were “falling hard” near deadline after startingseveral cents higher, a producer surmised they were being held upat first by “hurricane hype.” Other sources also mentioned that asthe reason for the relative Eastern strength, saying they couldthink of no other explanation.

Trading at the New York Mercantile Exchange returned to “morenormal” levels Monday following last weeks GasMart/Power tradeshow, a phenomenon one broker said was reflected in the 4.8 centgain (to $2.215) the June contract posted yesterday. “Cash marketprices were up a dime or so on the weather, and futures traderstook notice,” he said. However, he noted the strength was notenough to forge a settle above major resistance at $2.26, which ledhim to believe “the technical trading range remains.”