Posting

After posting 7.3 cent rally to kick off the week Monday, thefutures market found itself in a spirited see-saw battle pittingprice-optimistic bulls versus price skeptical bears Tuesday. In theend however, the market sided with the trend as the bulls came awaywith their fifth gain in as many days by nudging the May contract3.2 cents higher to $2.331. The May contract expires today at 3:10EST.

Dynegy had a whopper of a first quarter, posting a 66% increasein operating income from wholesale gas and power marketingoperations and a 20% jump to $22.3 million in net income from alloperations, excluding special items.

Exxon was hit and hit hard during the first quarter, posting a40% drop in profits, the company announced yesterday. Earningsdropped to $1.02 billion from $1.82 billion in 1Q98. Revenue fellto $26.884 billion from $29.964 billion in 1Q98. The results fromthe first three months of 1999 also included a $120 million chargefor restructuring Japanese operations.

For the second day in a row the futures market openeddramatically higher en route to posting a $2.08 daily high in thefirst hour of trading. And similar to Wednesday’s topsy-turvysession, no new buying was seen to help lift the May contract overresistance in the $2.07-09 area, which paved the way forprofit-taking activity yesterday afternoon. However in contrast tothe day prior, Thursday’s trading saw a late rally, which buoyedthe market into settlement and put a positive spin on the day’sevents. The May contract finished up 4.5 cents to $2.069.

Volume growth in the power marketing business dwarfed that ofgas with some marketers posting year-to-year increases of more than1,000% and gains of more than 100% not unusual. Total sales volumesfor the year for the top-20 gas marketers rose 17%, or 17 Bcf/d, to117 Bcf/d, whereas for the power marketers volumes soared 103%, or935.81 million MWh, to 1,841.44 million MWh. Such leaps are notsurprising considering power marketing is a less mature businessthan gas and targets a much larger market. (See table, page 4)

Volume growth in the power marketing business dwarfed that ofgas with some marketers posting year-to-year increases of more than1,000% with gains of more than 100% not unusual. Total salesvolumes for the year for the top-20 gas marketers rose 17%, or 17Bcf/d, whereas for the power marketers volumes soared 103%, or935.81 million MWh, to 1,841.44 million MWh. Such leaps are notsurprising considering power marketing is a less mature businessthan gas and targets a much larger market.

After posting modest gains last Thursday, the futures marketagain succumbed to selling pressure Friday as traders tried to pushthe December contract below support at $2.25. But, $2.265 was asfar as the contract could plumb and the prompt month was left tosettle for the week at $2.275. Sources pointed to bearishfundamentals and weak, last-day prices as reasons for the decline.

The November contract debuted as the prompt month yesterday byposting modest gains during a quiet trading session that saw nofresh news. November opened lower and quickly tested Monday’s $2.27low, but light commercial buying helped drive the market up 4.5cents to settle at 2.347 for the day. Estimated volume was a modest33,428.

FERC has issued a final rule requiring interstate pipelines toidentify the names and addresses of their marketing affiliates ontheir web sites on the Internet. The new rule is aimed at assistingthe Commission in its oversight efforts and at helping shippers tobetter monitor transportation transactions between pipelines andtheir affiliated marketers.