Prices

Prices ranged from essentially flat to down about 15 cents at Malin Monday. Apart from Malin, all other declines were generally a dime or less. Weather fundamentals remained weak in the northern market areas and Tropical Storm Chantal was getting little credence as a serious threat to Gulf of Mexico production for the time being. Those factors and screen weakness accounted for much of the post-weekend cash softening, sources said.

After carving out a wide, 57-cent trading range over the previous two sessions, natural gas futures stayed close to home Friday as many traders choose to wait on the sidelines until a clearer fundamental picture develops. The September contract finished at $3.303, down 6.4 cents for the day, but up 26.3 cents for the week.

Hot weather remained the key to higher cash prices at nearly all points Tuesday. Most gains were fairly modest around a dime or less, but ranged higher at Texas Eastern M-3 and Algonquin citygates and were topped by an increase exceeding 40 cents at Transco Zone 6-NYC.

Wholesale power prices helped propel Southern Co.’s earnings up 5% in the second quarter, and company officials said the Southeast’s largest utility remains on target to meet its financial and operational goals for the year. Earnings were $270 million, or 40 cents a share, at the top of the analysts’ predictions for the quarter, up from $256 million, or 39 cents a share for the same period of 2000. Operations earnings from the quarter excluded Mirant, the company that completed its spin off to Southern’s shareholders April 2 (see NGI, Feb. 26).

In his latest review of the California market, FERC Chairman Curt Hebert said that while the levels of interstate natural gas pipeline capacity and intrastate capacity serving the state have risen since the start of the year, the gap between the two has grown even wider and could serve to further constrain delivery points there.

With the exception of hefty double-digit upticks at California points, the rest of the cash market was mostly an array of flatness mixed with small increases and decreases Tuesday. Expectations of another large storage injection figure this afternoon and the approach of cooldowns in key market areas such as the Northeast had several sources looking for general softness today.

Weekend prices bowed under the weight of the umpteenth huge weekly storage injection report and generally mild weather in the key Midwest and Northeast market areas. Despite reports of air conditioning load starting to pick up to near-normal summer levels in the South and Midcontinent, quotes declined between a nickel and 20 cents at most points, with much bigger plunges seen in California.

California Gov. Gray Davis said the the state’s $8.9 billion estimate for refunds owed to its electric customers isn’t negotiable, but he will to consider alternative forms of payment other than straight cash refunds, such as the re-negotiation of long-term power contracts.

A Houston-based source characterized the situation: “People just have no idea where this market is going to settle.” That was telling it like it is Friday, as the July aftermarket began substantially below first-of-month indexes and even further removed from end-of-June pricing.