Round

The natural gas futures market turned lower Monday as bears won Round One of what is shaping up to be a compelling battle between short- and intermediate-term weather outlooks. As is often the case on the first trading day of the week, the price action began in the overnight Access trading session. By the time the open-outcry trading session commenced at 10 a.m. EST, bulls were already faced with having to climb out of a deep deficit.

Driven largely by the year-round tightness in natural gas supply and expectations of normal temperatures for the upcoming heating season, the Energy Information Administration (EIA) in its “Winter Fuels Outlook” said last Tuesday it foresees residential customers consuming less gas but paying more this winter despite an anticipated adequate level of supply and lower wellhead prices.

Driven largely by year-round tightness in natural gas supply and expectations of normal temperatures for the upcoming heating season, the Energy Information Administration (EIA) in its “Winter Fuels Outlook” said Tuesday it foresees residential customers consuming less gas but paying more this winter.

With its Ladyfern field showing a sharp decline last year, Canadian Natural Resources Inc. plans to step up its exploration and production program in a recently acquired region of Alberta, sticking with a strategy to keep its natural gas production in North America on an equal pace with oil.

IntercontinentalExchange (ICE) said it is conducting an internal investigation into a report by Duke Energy on Tuesday that it conducted 23 round-trip trades on the electronic trading system. ICE said that as a part of its investigation it will consider whether enhanced internal procedures are necessary to ensure the orderly, efficient and fair markets that customers expect. Duke told the Securities and Exchange Commission the transactions “had the apparent purpose of increasing volumes” on ICE and increased its revenues by $127 million in 2001, or about 0.25% of its $51 billion in gross revenue from gas and electricity trading and marketing last year (see Daily GPI, July 17). Duke is one of 13 equity owners in ICE.

IntercontinentalExchange (ICE) said it is conducting an internal investigation into a report by Duke Energy on Tuesday that it conducted 23 round-trip trades on the electronic trading system. ICE said that as a part of its investigation it will consider whether enhanced internal procedures are necessary to ensure the orderly, efficient and fair markets that customers expect. Duke told the Securities and Exchange Commission the transactions “had the apparent purpose of increasing volumes” on ICE and increased its revenues by $127 million in 2001, or about 0.25% of its $51 billion in gross revenue from gas and electricity trading and marketing last year (see Daily GPI, July 17). Duke is one of 13 equity owners in ICE.

U.S. Bankruptcy Judge Arthur Gonzalez approved a third Enron Corp. retention plan Tuesday that will pay up to $140 million for bonuses to keep employees from quitting as it reorganizes. However, he denied a request to shield from possible litigation by creditors the $105 million from two previous retention bonus packages that were paid to 237 Enron employees.

Amid a heavy round of market-on-close commercial selling, natural gas futures dropped perilously close to new 34-month prompt-month lows yesterday as traders — armed with the knowledge that temperatures are well-above normal across much of the East — gained confidence that there would not be a short-covering rally until after the February contract goes off the board Tuesday. With that, February completed its penultimate trading session at $1.908, down 12.9 cents for the session.

Petro-Canada has won the latest round in a continuing drive by Canadian natural gas producers to foster a competitive market in pipeline services. The National Energy Board (NEB) granted Petro-Canada approval to lay a bypass, titled the Medicine Hat Pipeline, past southeastern Alberta facilities of TransCanada Pipelines Ltd.’s Nova Gas Transmission. The project also detours around earlier bypass lines built in the prolific production region by Alberta Energy Co (AEC).