Pushes

Natural gas futures dropped lower at the open Tuesday as traders returned from the holiday weekend to a less than supportive fundamental outlook. In addition to the milder temperatures expected in September, weather forecasters also played music to bears’ ears by predicting that Hurricane Fabian poses more of a threat to New England than to the Gulf Coast states. The October contract was hit heaviest by the selling, dropping 9.2 cents to close at $4.639. At 63,392, estimated volume was moderate.

Deja vu? Similar to last Monday’s market, rising cash prices Friday derived much of their support from previous-day futures strength. They certainly weren’t getting much benefit from weather fundamentals. Although high temperatures in the 90s and above continued to reign from the western Gulf Coast through the Midcontinent, desert Southwest and Rockies into parts of the Upper Plains, those conditions were largely unchanged from Thursday. The key Midwest and Northeast market areas remain unusually mild for early August.

American Electric Power (AEP) has extended a deadline for the submittal of bids on all 29 of the power generation units of its AEP Texas Central Co. subsidiary, which have a total capacity of 4,497 MW.

Flying low under the normal local media and environmental radar screens, Japanese mega-conglomerate Mitsubishi is pushing ahead with preliminary plans for building a liquefied natural gas (LNG) receiving terminal along the Southern California coast in Long Beach Harbor on part of a former U.S. Naval Base. A local official connected to the Japanese giant said it is only a few months away from making formal federal energy and environmental filings.

Flying low under the normal local media and environmental radar screens, Japanese mega-conglomerate Mitsubishi is pushing ahead with preliminary plans for building a liquefied natural gas (LNG) receiving terminal along the Southern California coast in Long Beach Harbor on part of a former U.S. Naval Base. A local official connected to the Japanese giant said it is only a few months away from making formal federal energy and environmental filings.

Lehman Brothers analyst Thomas Driscoll is looking for exploration and production company shares, particularly the “gassier” ones, to have a solid year in 2003 because of an expected market “squeeze,” which he predicts could be similar to one in 2000 when storage injections were “woefully inadequate” and gas shortage fears caused prices to skyrocket to $10 by December.

Lehman Brothers analyst Thomas Driscoll is looking for exploration and production company shares, particularly the “gassier” ones, to have a solid year in 2003 because of an expected market “squeeze,” which he predicts could be similar to one in 2000 when storage injections were “woefully inadequate” and gas shortage fears caused prices to skyrocket to $10 by December.

The 10-cent spike in March futures in the face of softer holiday weekend demand at most locations was enough to help cash prices manage gains of about a nickel on average and much more in the Northeast, which was expecting severe cold on Saturday and Sunday.

In yet another week’s worth of twists and turns for California’s power markets, a California state senator last week said that he is proposing legislation that would eliminate the California Independent System Operator (CAISO) and return management of the grid to the state’s three major private sector utilities to oversee their own control areas.