Reaction

The natural gas futures market showed little reaction to the 49 Bcf withdrawal reported by the Energy Information Administration in its weekly gas storage report on Thursday morning. The number that was within the range of market expectations. However, as the mercury continued to drop in key eastern energy markets Thursday, January natural gas futures pushed higher, settling at $13.027, up 44 cents for the day.

Shrugging off lingering technical bullishness, the natural gas futures market tumbled lower Thursday as traders adjusted their positions in reaction to slightly bearish supply news. Light trading volume at Nymex due to traders’ observance of Yom Kippur was seen as adding to the price volatility, with the November contract carving out a wide, 41-cent trading range. It closed for the session at $13.103, down 42.1 cents for the day.

Citing Wall Street’s favorable reaction to its utility “back-to-basics” movement, Spokane, WA-based Avista Corp. was elevated to an investment-grade credit (Baa3), albeit the lowest rung, by Moody’s Investors Service, specifically related to about $90 million of debt by the utility holding company. Concurrently, the rating agency assigned the same rating to Avista’s five-year $350 million committed senior secured credit agreement with a December 2009 maturity.

Citing Wall Street’s favorable reaction to its utility “back-to-basics” movement, Spokane, WA-based Avista Corp. was elevated to an investment-grade credit (Baa3), albeit the lowest rung, by Moody’s Investors Service on Friday, specifically related to about $90 million of debt by the utility holding company. Concurrently, the rating agency assigned the same rating to Avista’s five-year $350 million committed senior secured credit agreement with a December 2009 maturity.

With Congress due back in session in less than two weeks, Republican staffers believe they may have reached a compromise on the controversial issue of liability protection for producers of the gasoline additive, methyl tertiary butyl ether (MTBE), that has held up the Senate energy bill since the start of the year.

In a delayed reaction to the bullish combination of a slightly supportive storage report (78 Bcf injection) and an explosion at the Moss Bluff storage facility east of Houston, the natural gas futures market turned higher Thursday morning as light speculative buying mixed with continued end-user hedging activities. The September contract finished the session at $5.507, up 12.5 cents for the session.

Caught in a mix of short-covering and a delayed reaction to supportive storage news released Thursday, the natural gas futures market turned modestly higher Friday to break the string of losing sessions.

After dropping 5% Thursday in reaction to the overwhelmingly bearish storage news, the natural gas futures market rebounded Friday as traders covered shorts ahead of the weekend. Adding to the bullish euphoria over the expected chill over the weekend, traders were reticent to hold short positions for fear that the market would rally if another round of chilly forecasts were issued Monday morning.

In reaction to El Paso Corp.’s weak exploration and production (E&P) performance in the third quarter, Moody’s Investors Service on Tuesday reduced its rating outlook to negative from stable, while analysts with Credit Suisse First Boston (CSFB) suggested a partial sale or spin-off for the E&P unit.