PG&E Corp.’s stock price plunged nearly 30% last Thursday to $9.76 and dropped 10% more Friday to end the week at $8.81, following a downgrade of its National Energy Group (NEG) merchant and trading subsidiary to junk by Standard & Poor’s. The downgrade set off ratings triggers in $1.6 billion of NEG obligations.
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Protracted Softness Seen Following Price Meltdown
The cash market plunged Thursday in response to the latest reports of increased storage (both new and revised) and the screen’s subsequent dive Wednesday afternoon. Weather fundamentals remain generally lightweight and the latest Atlantic tropical storm was fizzling out almost as fast as it had developed.
Debate Over Price Caps Continues on Capitol Hill
As California was plunged into its second consecutive day ofdaytime darkness on Tuesday, FERC regulators remained as divided asever on whether to impose price caps on wholesale power sales inthe West to prevent continuing blackouts and price hikes thissummer.
Prices Down as Anticipated; Weekend Expectations Mixed
Cash prices plunged as expected Thursday, with nearly everypoint in all markets down between 20 and 30 cents.
Fulfilled Predictions of Cash Plunge Called a No-Brainer
To the surprise of absolutely no one, cash prices plunged acrossthe board Tuesday. It was an easy call to make considering theresidual effect of Monday afternoon’s steep screen dive and warmingweather trends that are likely to get even warmer next week,sources said.
Storage Injections Punch Hole in Futures Bubble
Futures got crushed again yesterday. After settling at $2.737,down 8.8 cents on the day, the October contract plunged to the mid$2.60s during the after hours Nymex Access trading session,following what was perceived to be a very bearish gas storagereport by the American Gas Association. Just one week ago, theOctober contract reached a high of $3.15/MMBtu.
West’s Friday Hex Holds; East Up on Heat Prospects
In the matchup of East vs. West markets, it was the East by aknockout Friday. While western prices plunged for the thirdstraight weekend, the East relied on existing and predicted hotweather to range from flat to up about a nickel at most points andrealize gains of almost a dime at Northeast citygates. A screenrise of less than a penny was considered a negligible factor inboth regions.