Return

Following the release of some of the most price-constructive medium range weather forecasts thus far this winter, natural gas futures shuffled higher Thursday. Continued short-covering pressure was enough to promote prices to new six-week highs for the third day in a row. However, the buying was done in an orderly manner, and because it was almost evenly matched by local and commercial selling, the day’s gains were limited. The March contract settled at $2.425, up 4 cents for the session. By virtue of yesterday’s 118,144 figure, estimated volume has easily eclipsed the 100,000 mark each day this week.

Technical factors, short-covering — and oh yeah, a tad of returning cold weather fundamentals — were the most plausible reasons sources could cite for mostly higher weekend prices, despite the usual demand slump for such a trading period. Friday’s firmness was fairly moderate with nearly all points ranging from flat to nearly a dime up; most gains were about a nickel or less.

The “new” Enron Corp. will be a smaller company, based on hard assets with predictable revenue and cash flow, its new interim CEO said in his first press conference Wednesday night in Houston. He also was emphatic in talking about what caused the Fortune 100 company to go under so quickly. “I frankly don’t care,” said Stephen Cooper.

TransCanada said an unplanned outage occurred Tuesday at Station 211 due to exhaust problems with the C compressor unit. It expects to return 211C to service Friday. Due to increased demand at Niagara, discretionary service on the Kirkwall Lateral is being restricted. Diversions to Niagara and Douglastown may be affected, including diversions from Douglastown to Niagara, the pipeline said.

Enron Corp. affiliates have continued to file for Chapter 11 bankruptcy protection in recent days, making the total 28 so far. On Monday, telecommunications products trader Enron Broadband Services LP filed for bankruptcy protection in U.S. Bankruptcy Court in Manhattan listing assets of $64.5 million and debt of $63.7 million, not including off-balance sheet and contingent obligations. Affiliate Enron Freight Markets Corp. filed last Friday, listing $6.3 million in assets and $4.7 million in debts.

The return of some extra heat, along with the general resumption of business-related demand after a weekend, were enough to generate a moderately strong rebound in the cash market Monday. Most of the increases ranged between a nickel and a quarter, but the removal of LDC OFOs allowed dollar-plus jumps at all California points except Malin.

Bolstered by the return of hotter weather to some regions and a screen gain of nearly a dime, nearly all points ranged from flat to about a nickel higher Tuesday. A PG&E citygate gain of slightly more than 15 cents, coupled with declines of about a dime at Malin and about 25 cents at Southern Border into PG&E, were the primary exceptions to mild firmness.

With lack of progress in the FERC settlement talks, state legislative negotiations and among state regulators, all holding the hope for some financial relief, Southern California Edison Co. officials indicated Tuesday that they will continue to resist bankruptcy if state and federally-generated relief falls short, but they will be in a “very difficult” predicament unless some solution comes out of the state legislature by mid-August.

Even with more federal regulatory intervention and a return to closer-to-normal hydroelectric supplies in the future, California is facing at least two more years of electricity supply-demand imbalance and the prospect for higher wholesale power prices as a result, according to Andre Meade, utility analyst at Commerzbank Securities.