Scales

Citing a need to prepare for competitive environments, CinergyCorp. announced steps to reduce the size of its corporate centerlast week.

Sweltering heat and higher cash prices tipped the scales inbulls’ favor again yesterday at the New York Mercantile Exchange asprices snapped back with a one-two combo to easily recoup thealmost nickel decline posted during Tuesday’s Access trading. Thefirst spike occurred at the open as speculators were seen loadingup their long positions for the second morning in a row. After thatinitial surge the market moved mostly sideways until right beforethe close, when a round of market on close (MOC) buy orders liftedthe August contract 2.7 cents to its $2.601 final resting place.For the fifth day in a row, estimated volume topped the 100,000mark at 139,502 contracts.

Activity in the natural gas pit at NYMEX has beenuncharacteristically quiet recently with low volatility and sub-5cent trading ranges the rule rather than the exception. In fact,the only real excitement in the past couple of weeks came Mondaywhen the July contract bounced 3 cents in a late rally. But eventhat was quickly dismissed by many traders who considered itnothing more than a freak, expiration-day anomaly in an otherwisesubdued market. Enter the August contract, which wasted little timeyesterday in moving dramatically higher in a rush of speculativeand commercial buying. The newly crowned prompt month finished up7.6 cents for the session at $2.400.

TransCanada PipeLines said yesterday the loss of two shipperagreements enabled it to slash the price of its 1999 expansionproject by C$575.9 million, but it still anticipates being able toprovide 76% of the capacity (208 MMcf/d) of the original project byNovember 1999. The Canadian pipeline monopoly filed its originalproject application with the National Energy Board in April, butmodified its plans this week.

Unocal Corp. confirmed its 1998 oil and gas production andcapital spending will be lower than originally anticipated becauseof the lower oil price outlook, but said it would continue toevaluate spending plans throughout the year. Production is expectedto be down 5% from earlier forecasts to 178,000 barrels of oilequivalent (BOE) per day. Capital spending is expected to total$1.30-$1.35 billion, about 10-13% percent below its earlierforecast.