Rise

A lot of cash points came close to matching the screen’s rise ofalmost a nickel Wednesday, give or take a penny or two. In additionto the futures influence, there was “a little bit” of cold here andthere to help generate a modest price rally, though still notenough cold to help much, sources said.

Cash prices continued to act like rampaging bulls as Octoberbegan Thursday. Double-digit increases of between 10 and 20 centswere the order of the day almost across the board as traders notedchilly weather in major northern market areas and the fact thatGulf of Mexico production, while nearly back to normal afterhurricane outages, still was missing a few hundred MMcf/d. At leasttwo big processing plants in southeast Louisiana remained shut downdue to storm damage. Cash also built on Wednesday’s big screenrun-up and initially higher futures prices Thursday. Even theNovember contract eventually wound up with a small loss, a traderpointed out.

The Canadian natural-gas community sees potentially sharp priceincreases developing on its horizon, thanks to a happy coincidenceof pipeline expansions and economic conditions on the supply side.As the Alliance Pipeline accepted its final certificate for itsU.S. leg from the Federal Energy Regulatory Commission, risingprices were being predicted by prominent fixtures ranging fromPeters & Co., an investment boutique specializing in energystocks, to the dean of Canadian geological and engineeringconsulting houses, Sproule Associates.

While gas reserves in the lower-48 states declined slightly lastyear (down 519 Bcf, or 0.3%), gas discoveries shot up 27% “from avery good 1996,” to the highest level in the past decade, theEnergy Information Administration said in an advance summary of astudy titled “U.S. Crude Oil, Natural Gas, and Natural Gas LiquidsReserves 1997 Annual Report.”

UtiliCorp United reported a 15% second-quarter earnings risedespite weakened performance in its energy delivery segment,sharply diminished results from Aquila Gas Pipeline, and anelectric rate cut in Missouri. Growth in wholesale energy marketingand international operations get the thanks for boosting 1998second quarter earnings to $23.4 million from $20.3 million a yearearlier.

Florida’s electric utilities plan to add more than 10,580 MW ofnew generating capacity between now and 2007 to meet surgingdemand, the Florida Reliability Coordinating Council told thestate’s Public Service Commission.

Heat makes air and various other gases rise, but it was able todo little if anything to prevent a general rout in natural gas cashprices Tuesday. Decreases straddled the dime level at the greatmajority of points even as heat waves continued to sear much of thenation and sparked some $1,000-plus hourly prices per MWh in somepower markets.

Northern Border Partners LP reported a 15% increase in earningsper unit. Earnings improvement from the first half of 1997 wasattributed mainly to return on equity from investment in theChicago Project, an $839 million expansion and extension of theNorthern Border Pipeline system.

Unlike much of last month, when Western markets persistentlydisplayed weakness while their Eastern counterparts were rising, itis the West flexing a bit of price muscle this week. Rockies pipeswere back up into the $1.30s Tuesday after several had made a briefsojourn into sub-$1.30 territory Friday and Monday. The reason forthe rebound mystified one trader. “It’s not that cold in theregion, so go figure,” he said, adding maybe it was just a resultof the normal “tug of war” between gas buyers and sellers.