Outset

At the outset of June the indicators are mounting that water in the Pacific Northwest will continue at record levels and the amount of natural gas needed in thermal electric generation will continue to decline.

At the outset, the only thing clear about California’s two-phase 2004 gas restructuring plan is that nothing is clear. There are endless questions among stakeholders. The major utilities are supposed to file their wish lists for the omnibus proceeding by the end of this month.

Change was in the air right from the outset of natural gas futures trading Wednesday. After opening higher in three out of the last four sessions, gas futures gapped lower at the opening bell Wednesday amid a concert of fund and local selling. However, when it became apparent that last week’s lows in the mid $2.70s were unobtainable, the market reversed its direction and climbed through several key levels of resistance in the last hour of trading. The August contract gained 15.3 cents to close at $3.042, its highest daily settle since July 3. At 151,295, volume was extremely heavy.

Change was in the air right from the outset of natural gas futures trading Wednesday. After opening higher in three out of the last four sessions, gas futures gapped lower at the opening bell Wednesday amid a concert of fund and local selling. However, when it became apparent that last week’s lows in the mid $2.70s were unobtainable, the market reversed its direction and climbed through several key levels of resistance in the last hour of trading. The August contract gained 15.3 cents to close at $3.042, its highest daily settle since July 3. At 151,295, volume was extremely heavy.

In addition to providing about 1,500 MW of new power supply since the outset of summer, Calpine Corp. Tuesday told investors on a conference call that it has also enhanced California’s natural gas resources for the state market and its own operations.

The futures market came under hefty selling pressure right fromthe outset Tuesday, as the market put aside hurricane fears toconcentrate on the overall bearish outlook for natural gas. TheSeptember contract sustained the largest losses, slipping 9.8 centsto settle at $1.828 for the day.