While a number of market participants believe that noncommercial traders are responsible for natural gas futures price spikes and the high level of volatility swirling throughout the market, Tom Saal, a broker with Commercial Brokerage Corp. in Miami, believes the allegations are false.
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Gas futures extended Monday’s gains on Tuesday as market participants covered short positions and also responded to the Northeast heat and Tropical Storm Claudette in the central Caribbean. The National Hurricane Center upgraded what had been a tropical wave directly to a tropical storm on Tuesday. The August futures contract ended the day up 12.2 cents to $5.503, not far from its daily high, but opinions were mixed on the market’s direction for the remainder of the week.
Noting that some participants in the energy sector might consider his group to be the “perpetual natural gas bulls,” Raymond James & Assoc. analyst Marshall Adkins said the market has proven that “we have, in fact, been overly bearish.” Citing the summer gas storage re-fill problem, Adkins said that Raymond James is once again upping its 2003 gas price forecast from $5/Mcf to $6/Mcf.
Noting that some participants in the energy sector might consider his group to be the “perpetual natural gas bulls,” Raymond James & Assoc. analyst Marshall Adkins said the market has once again proven that “we have, in fact, been overly bearish.” Citing the summer gas storage re-fill problem, Adkins said that Raymond James is once again upping its 2003 gas price forecast from $5/Mcf to $6/Mcf.
Enron Corp.’s collapse created a tidal wave, stormy enough to cause a “sea change” in the industry, an energy consulting firm asserts in a new report. With the changes come the “traumatic” phases: first is shock, disbelief and denial, and the distancing by other companies. Soon after, the “wave of senior management head-rolling begins.” Then there is chaos — and that’s where the industry is now.
Futures market observers and participants braced for extreme price volatility last week in preparation for the new weekly storage survey by the Energy Information Administration (EIA), but what they got was an uncharacteristically quiet reaction from the futures market on Thursday when EIA reported a 39 Bcf weekly injection and 1,594 Bcf of working gas in storage. Prices chopped sideways amid equal parts local trader selling and commercial buying before June finished the day at $3.719, down 2.7 cents.
New York City-based Caminus Corp., a leading provider of software and strategic consulting services to energy market participants worldwide, announced Tuesday that it has registered with the Securities and Exchange Commission for a proposed underwritten public offering of 3,370,000 shares of its common stock. Of the total, the company will be offering 1,500,000 shares, with the remaining shares offered by certain selling stockholders. The registration statement also covers an additional 505,500 shares that will be subject to an option granted to the underwriters for over-allotments, if any. The company currently has 17.9 million common shares outstanding. The managing underwriters of the offering are Banc of America Securities LLC, Robertson Stephens and Wachovia Securities. Caminus also said late Tuesday that a number of leading energy utilities, producers, pipelines, gas and power marketers, physical and financial traders, and integrated energy companies have licensed software spanning all of the company’s product lines during the fourth quarter of 2001. Customers included Eni S.p.A., Hess Energy Trading Co. LLC, Nicor Enerchange LLC, RWE Trading Americas Inc., Sequent Energy Management LP. and Prior Energy. In addition, the company said that a lot of existing customers, including American Electric Power Service Corp. and PG&E Gas Transmission Corp., licensed additional software during the fourth quarter.
Coming off a strong year for its software and its consulting services to energy market participants, New York City-based Caminus Corp. reported record financial results for the fourth quarter and full year 2001. The company posted pro forma net income of $9 million ($0.55 per share) for full year 2001, compared to $7.6 million ($0.49 per share) during 2000. Pro forma net income for the fourth quarter was $4.8 million ($0.28 per share), compared to $2.9 million ($0.18 per share) for the fourth quarter 2000.
The American Gas Association currently is polling participants in its weekly storage survey to see if they will continue to cooperate with its survey through next April when the Energy Information Administration (EIA ) will take over the chore. AGA had initially announced in mid-October that it would publish its last survey on Jan. 2, 2002, and EIA followed up with an announcement last month that it would step in.
At the request of several major market participants, the California Energy Commission revised its draft natural gas infrastructure report to increase its short-term assuredness, but it also raised questions about over-reliance on natural gas for electricity generation longer term. The report is on the commission’s agenda for approval Wednesday (Oct. 3).