Quite

The one-day “Natural Gas Summit” held yesterday in Coloradoturned out to be quite an eye-open for industrial gas customers andsuppliers alike, according to participants.

Merger turmoil and tight margins are putting the screws to quitea few energy marketers, but Frost & Sullivan still sees plentyof room for the industry to grow. Several of the top-20 marketersof 1998 have exited the market, while other companies have beenspurred to acquire assets and start online trading, according to arecent study by the group.

Columbia Energy Group revealed yesterday that its defenseagainst a hostile takeover by NiSource has become quite costly,reaching $9 million in pre-tax expenses during the third quarter.The company also took a $4 million pre-tax charge during the thirdquarter for restructuring its retail marketing operation. The twosetbacks combined led to a net loss of $9.7 million (12 cents pershare) during the quarter compared to net income of $11.2 million(13 cents per share) during the same period last year. The companyreported income from continuing operations of $800,000, or 1 centper share, compared to $12.2 million, or 14 cents/share in 3Q98.

Ding-dong the downtrend is dead. Well maybe its not dead quiteyet, but it certainly was dealt a potentially fatal blow yesterdaywhen short-covering by funds quickly turned into a buyingfree-for-all as commercials and locals entered the fray. The Augustcontract finished at $2.395, up 14.2 cents for the day. Nearly asimpressive as the price action was estimated volume, whichregistered 113,049 contracts.

The cash market settled down to mostly small gains Tuesday,although quite a few points registered close to flat. The largerincreases of a nickel or more were concentrated in California andthe Permian Basin and on CIG, which played belated catch-up withother Rockies pipes by rising almost a dime.

Colder than last year wasn’t quite cold enough for a number ofLDCs reporting first quarter earnings. While temperatures duringthe first three months of the year were down, earnings weren’t ashigh as they could have been had winter weather been more normal.

Many market prognosticators have realized recently that theirgas price projections are quite a bit too low for the rest of theyear because of declining gas wellhead deliverability, a reducedstorage surplus relative to last year and ever increasing gasdemand. The Energy Information Administration joined that crowdlast week, raising its wellhead price forecast for the fourthquarter 25 cents to $2.41/Mcf.

Many market prognosticators have realized recently that theirgas price projections are quite a bit too low for the rest of theyear because of declining gas wellhead deliverability, a reducedstorage surplus relative to last year and ever increasing gasdemand. The Energy Information Administration joined that crowdyesterday, concluding its wellhead price forecast for the fourthquarter was 25 cents too low. It raised it to $2.41/Mcf in its MayShort Term Energy Outlook.

The staff of the Oregon Public Utility Commission (OPUC) gaveNorthwest Natural Gas (NWNG) quite a beating this week in a generalrate case. The staff recommended a revenue reduction of $19.9million per year from the gas utility’s operations in Oregon. NWNGhad requested a revenue increase of $14.7 million per year.