Relationship

Just two days after worries over Constellation Energy Group’s relationship with bankrupt Lehman Brothers Holdings Inc. sparked a freefall in the electricity supplier Goliath’s stock price, it appears that the white knight to the rescue will be Berkshire Hathaway’s MidAmerican Energy Holdings Co., which has agreed to purchase all of the outstanding shares of Constellation Energy for $4.7 billion, or $26.50/share, cash. However, reports on Friday warned that a company was expected to come in with a competing bid.

Shares in Baltimore, MD-based Constellation Energy plummeted Tuesday on worries over the company’s relationship with bankrupt Lehman Brothers Holdings Inc. and fears that Constellation could lose its credit lines. The New York Stock Exchange halted trading in Constellation shares just before 2 p.m. EDT.

Creating value in the supplier/marketer relationship requires knowledge of both the market and potential counterparties, a pair of consultants said during a panel discussion moderated by New York Mercantile Exchange’s (Nymex) Joe Raia, senior vice president of marketing, at GasMart 2008 in Chicago last week.

Creating value in the supplier/marketer relationship requires knowledge of both the market and potential counterparties, a pair of consultants said during a panel discussion moderated by New York Mercantile Exchange’s (Nymex) Joe Raia, senior vice president of marketing, at GasMart 2008 in Chicago Wednesday.

Continuing to prove that the on-again/off-again relationship between natural gas and crude markets is currently in off mode, November natural gas futures on Monday moved 18 cents higher to close at $7.050 while November crude dropped $1.42 to finish the day’s regular session at $80.24/bbl. Talks of a La Nina event returning to the Pacific also had gas traders wary of a repeat of the late 2000 price spike, which took place during the last recorded La Nina episode.

No matter how high (or low) North American natural gas prices get in the coming years, their relationship to world markets for oil — and also natural gas — likely will be getting more complicated, or at least interesting.

Despite its on again/off again relationship with petroleum futures, July natural gas accepted some peer pressure Tuesday as it dropped lower on its expiration. After notching a low of $6.900, July expired at $6.976, down 16.2 cents on the day.

MarkWest Hydrocarbon executed agreements with Equitable Production that restructures their processing relationship in Appalachia. The new agreements provide Equitable with additional flexibility in its gathering operations upstream of the MarkWest Energy Partners LP processing facilities, and provide Equitable with assurances of continued processing capacity and operations. The new agreements also protect MarkWest Hydrocarbon during periods of low processing margins. Terms of the deal were not disclosed.

Rising and falling almost in unison with oil over the past few months, natural gas futures continued the trend Tuesday as the June contract notched a new high of $6.40, before settling at $6.386 up 20.2 cents on the day. The June oil futures contract reached a high of $40.15 on Tuesday, trading at a level that has not been seen since late 1990. The contract closed up $1.13 at $40.06 over supply fears.