Rises

With the failure of the state to agree on a rescue plan to restore Southern California Edison’s financial viability, rumors last week grew louder that three of the major generators who are creditors would take the utility into involuntary bankruptcy.

Even though a recent report by the National Association of Purchasing Managers (NAPM) has signaled that natural gas demand is moving toward recovery, industrial-related demand will “remain anemic” until inventory levels come down and production increases, according to last week’s Raymond James Energy’s Stat of the Week.

Even though a recent report by the National Association of Purchasing Managers (NAPM) has signaled that natural gas demand is moving toward recovery, industrial-related demand will “remain anemic” until inventory levels come down and production increases, according to Raymond James Energy’s Stat of the Week Monday.

In light of natural gas storage injections far outpacing last year’s schedule, a sluggish economy and lost demand only trickling back to market, energy analysts from UBS Warburg, Salomon Smith Barney (SSB), Lehman Brothers and ABN-AMRO have taken another look at their respective companies’ 2001 gas price forecasts.

TransCanada PipeLines Ltd. (TCPL) reported yesterday that it nowexpects proceeds from its non-core asset divestiture program torise from the previous estimate of $3 billion to $3.45 billion. Asa direct result of this, the company expects to record a positive$200 million after-tax adjustment to last year’s provision fordiscontinued operations in the third quarter of 2000.

Except in the Rockies and Southwest, prices kept rising Tuesdaybut not nearly as spectacularly as on the day before. Californiawas still registering triple-digit increases, but otherwise, mostpoints went up between a nickel and 15 cents. The Pacific Northwestand Northeast citygates saw most of the non-California gainsgreater than 20 cents.

The cash market showed signs of fatigue Wednesday in strugglingto maintain this week’s upward momentum. Most new gains were in the5-15 cents range, and some western points were beating modestretreats. However, cash may get its second wind today after thescreen reacted quite bullishly to AGA’s first report of net storagewithdrawals this season.

As Mark Twain once observed, everybody likes to talk about theweather, and that was especially true in the gas trading communityTuesday. With the official calendar start of winter still more thana month away, it seemed like winter has already begun in almostevery region. The predictable effect was to keep both cash andfutures prices pushing higher, with the screen scaling previouslyunknown heights.

Although it was getting chillier Friday in major northern marketareas, traders agreed the weather wasn’t severe enough to justifyfurther strong jumps in cash prices. Rather, they said, it wascontinued muscle-flexing by the screen along with a fresh spurt ofbuying for storage that produced price gains ranging from about adime to a quarter at all but a few points.