Pointing

The finger-pointing and calls for market intervention — mostnotably centered on electricity price caps — heated up fasterthan the temperatures on both coasts this week, with merchantgenerators and incumbent regulated utilities drawing the ire ofstate and federal policymakers.

The futures market gave an early “head fake” — pointing lowerat the open — but support held and the market picked up momentumthroughout the trading session Monday. The December contract spikeddramatically higher near the close, registering a 11.2 cent advanceto $2.387. Despite the large trading range, volume was a little onthe light side with only 50,263 contracts changing hands.

Bulk power transactions in 1997 increased significantly over1996 levels, pointing to the continued emergence of a competitivewholesale power market, according to Metzler Services’ 1997operating data and statistics for the electric utility industry.

Although many signs have been pointing to a major rally infutures prices lately, Wednesday’s trading at the New YorkMercantile Exchange just may put an end to that talk. Aftermanaging to rise above key resistance at $2.50, the spot Augustcontract saw major selling by funds and locals, so much so thatAugust fell to a low of $2.41 before settling the day down 1.9cents at $2.450.