Plentiful

Most of the cash market varied little from flat Friday, but modest softness in the West tended to be barely more plentiful than small gains at eastern points. Moderately warmer temperatures were returning in the South, Northeast and Midwest, and cooling trends in the Rockies and desert Southwest were resulting in little cooling load remaining at western trading points.

Heating load was still plentiful going into the weekend, but prices dropped across the board anyway Friday. The cash market was swayed mostly by the subpar storage pull that was reported Thursday and the accompanying screen weakness, along with the National Weather Service’s forecast of above-normal temperatures during the coming workweek in most of the East and as far into the Southwest as Arizona (see Daily GPI, Feb. 18).

Prices recorded strong gains across the board Monday as heating load remained plentiful despite warming trends in some areas such as the Midwest and sections of the South. Quotes also got modest support from industrial demand returning from its typical weekend decline.

Despite still having a fairly plentiful amount of cooling load outside the Northeast, Pacific Northwest and California coast, cash prices fell at most points Thursday. They succumbed to a 7.4-cent retreat by July futures a day earlier and the fact that only the South, desert Southwest and parts of inland California are due to see temperatures go above the 80s Friday.

Accelerating the pace of losses notched in Thursday’s disappointing (for bulls) trading session, the natural gas futures market tumbled to new two-month lows Friday as light non-commercial selling went nearly unchecked by either local traders or commercial accounts.

For the winter billing period of November through April, Pacific Gas and Electric Co. said Thursday its 3.8 million residential customers will receive baseline volume increases of 5% to 26% for the lowest natural gas rates that it charges.

Despite languid cash market prices and plentiful supply heading forward, natural gas futures exploded higher Friday as traders covered shorts and squared their books ahead of the four-day holiday weekend (some cash traders admitted having to work a half-day Monday, but the futures market will remain closed until 7 p.m. EST Christmas Day for Access trading and until 10 a.m. Wednesday for regular pit trading). By virtue of its 20.9-cent rally and $2.895 closing price, the January contract broke to new three-week highs Friday, and moved above the February contract for the first time since Nov. 2. Heavy trading activity punctuated the move, with 116,361 in estimated volume.

Attempting to gain access to a potentially plentiful Gulf ofMexico gas supply, KeySpan Exploration &amp Production announcedTuesday it agreed with Houston Exploration Co.to jointly drilland develop 55 leases in the Gulf’s outer continental shelf. The$300 million agreement has an effective date of Jan. 1, 1999.

Attempting to gain access to a potentially plentiful Gulf ofMexico gas supply, KeySpan Exploration & Production announcedTuesday it agreed with Houston Exploration Co. to jointly drill anddevelop 55 leases in the Gulf’s outer continental shelf. The $300million agreement has an effective date of Jan. 1, 1999.