Safe

Once classified as safe investments suitable for “widows and orphans,” gas and electric utility stocks interest a broader cross section of investors, more interested in how well their investments perform and appreciate in value instead of the dividend yields or management performance, according to a new survey by Deloitte & Touche.

The Williams Companies completed the sale of another major asset Tuesday. Its 54.6% stake in Williams Energy Partners (WEG) went to a Delaware limited partnership recently formed by the private equity firms Madison Dearborn Partners LLC and Carlyle/Riverstone Global Energy and Power Fund II LP for $510 million in cash and $570 million in assumed debt.

Once classified as safe investments suitable for “widows and orphans,” gas and electric utility stocks interest a broader cross section of investors, more interested in how well their investments perform and appreciate in value instead of the dividend yields or management performance, according to a new survey by Deloitte & Touche.

Caught between forecasts calling for another blast of cold air and its seasonal inclination to move lower, natural gas futures shuffled sideways Friday as neither bull nor bear could get much of anything going. The market finished mixed, with gains in the front months contrasting with losses in the back of the strip. The new prompt contract March finished at $5.605, up 2.2 cents for the day and 14 cents higher for the week. Weighed down by losses in the winter 2003/04 contracts, the 12-month strip advanced only 1.1 cents to $5.016. At just 66,757, estimated volume was light and reflected the market’s lack of direction.

Heading into Friday’s trading session, there were about an equal number of market-watchers calling for a short-covering rally as were calling for a continued sell-down. As it turns out, they were both right.

Just when producers thought it was safe to head back into the waters of the Gulf of Mexico, Hurricane Lili appeared on the horizon ready to take another big bite out of Gulf gas production. Isidore forced 25 Bcf of gas to be shut in last week, according to the Minerals Management Service (MMS). It looks as though Lili could force a repeat of that situation this week, according to the latest reports from producers.

As the Enron debacle continues to unfold, energy companies, financial institutions and insurance firms are realizing exactly how exposed their respective companies actually are. Since the Dynegy/Enron Corp. merger was called off, companies have been eager to distance themselves, as well as confess to investors their exposure levels to the teetering giant.

With a modest 4.1-cent advance and $2.291 close Tuesday, February natural gas futures took another baby step toward what analysts and technicians believe could be the formation of a price bottom. That may seem like a bold prediction considering the overwhelmingly bearish fundamental picture. But after lying dormant during the downward price spiral of 2001, and in consideration of the large speculative short position, bull traders are cautiously rearing their horns once again.

Despite higher early morning over-the-counter and cash market pricing, natural gas futures managed only to check sideways yesterday as traders were content to wait on the sidelines ahead of today’s release of fresh storage and weather information. The February contract closed at $2.281, 0.9 cents above Monday’s close and just about in the middle of its tight, $2.23-32 trading range. By comparison, the gains in the out months were larger, enabling the 12-month strip to post a 2.6-cent gain to finish at $2.585.