Response

After plunging almost a dime lower in response to alarger-than-expected storage injection Wednesday afternoon, thefutures market shuffled sideways yesterday in ahurricane-abbreviated trading session. Traders were unable to gleanmuch fundamentally positive out of a natural gas market that isfaced with mild temperatures and little or no hurricane activity inthe wake of Floyd. The October contract finished at $2.546, down8.2-cents from Wednesday’s close.

In response to a recent court ruling, the Michigan PublicService Commission (PSC) issued a decision this week affirming itsauthority to carry out its 1998 electricity restructuring orders ona voluntary basis with participating utilities.

The sell-off continued Friday at Nymex as traders liquidatedlong positions ahead of the weekend in response to some blaringtechnical factors and in anticipation of moderating temperaturesthis week in key gas consuming regions. The September contractprobed lower to finish down 2.6 cents at $2.543 Friday. Estimatedvolume of 78,445 was low relative to the preceding five-straight,100,000-plus trading sessions.

In response to some nudging from the Senate, the White House hasofficially renominated Commissioner Curt Hebert Jr. to a newfive-year term at the Federal Energy Regulatory Commission. It’sexpected the Senate Energy and Natural Resources Committee willhold a hearing and vote out his renomination possibly by the Augustrecess. Until then, Hebert – whose current term expired June 30th -will continue to serve at FERC under a grace period that ends withthe current session of Congress in late October.

In response to a data request from CNG’s board, Columbia EnergyGroup extended its deadline to May 10 for the CNG board to respondto its unsolicited merger proposal. CNG asked for additionalinformation on a two-way collar mechanism in Columbia’s $6.7billion bid for the company (see NGI, April 26).

Petal Gas Storage Co., a subsidiary of Crystal Oil Co., said theopen season for the proposed expansion of its high deliverabilitysalt cavern storage facility near Hattiesburg, MS, received servicerequests exceeding proposed capacity.

Petal Gas Storage Co., a subsidiary of Crystal Oil Co., said theopen season for the proposed expansion of its high deliverabilitysalt cavern storage facility near Hattiesburg, MS, received servicerequests exceeding proposed capacity. The open season had beenextended until Nov. 16. Petal is evaluating requests. The proposedexpansion includes leaching an additional salt cavern with astorage capacity of 5.2 Bcf of gas of which 3.2 Bcf would beworking gas. The new cavern, when combined with the existingcavern, will result in a facility with 5.8 Bcf of working gascapacity and a total withdrawal capacity of 600 MMcf/d. The openseason includes additional storage capacity and receipt/deliverypoints on the pipelines of Tennessee Gas Pipeline, Koch Gateway(low-pressure and high pressure systems), Transco, Sonat, Destin,and Florida Gas Transmission.

The futures market spiked higher Monday in response to thethreat to natural gas supplies in the Gulf of Mexico posed byHurricane Mitch. There was an early buying surge as non-commericaltraders struggled to close out short positions ahead of the rally.However, once the market started its momentum, buying came from allsegments of the market. The November contract settled up 13.4 centsto $2.298.

Cash prices were down again Wednesday in response to typicalshoulder month lack of cooling demand and downward pressure fromfalling Nymex futures prices. The futures drop of about 8 cents ledmost cash points down by amounts in the same neighborhood orgreater. However, there were mild rebounds occurring late, said atrader in the Gulf Coast and Southwest markets.