Second

A second merchant underground natural gas storage field inCalifornia proposed for a depleted gas field 20 miles south ofSacramento is awaiting a draft environmental report from stateregulators in September to stay on its current timetable forstart-up next Spring.

Enron Energy Services (EES) inked its second major energymanagement outsourcing contract in the last three months Tuesday,as Suiza Food Corp., a Dallas-based manufacturer and distributor ofdairy products, agreed to receive comprehensive energy managementservices at more than 50 manufacturing facilities in 24 states.Although no amounts were disclosed, Enron did say the ten-year dealis its biggest outsourcing contract.

Except for some western upticks, the cash market bore remarkableresemblance to a pancake Wednesday. Flatness remained the order ofthe day at nearly every trading point. And much as on Tuesday, thelittle bit of price movement that did occur in the East wasgenerally a little lower.

For the second trading session in a row, early selling pressurewas reversed in afternoon trading allowing the market to close nearits daily high. The July contract notched a $2.325 low both Fridayand Monday, but settled back up above $2.37 both days. Evenestimated volume figures were similar with yesterday’s 43,630falling just short of Friday’s 45,070 mark.

UtiliCorp United added another Missouri-based utility to its recent acquisitions last week, buying Empire District Electric Co. in a stock and cash transaction valued at $800 million, including assumption of debt. The purchase comes only two months after UtiliCorp bought St. Joseph Light &Power for $270 million (see NGI, March 8).

For the second straight Thursday, natural gas traders ignored aseemingly bullish American Gas Association storage report bypressuring the market lower in light, long liquidation. The Junecontract was the hardest hit by the sell-off, slipping 6.4 cents to$2.295 in active trading.

For the second trading session in a row yesterday the Maycontract dipped lower at the open, but was unable to completelyfill in the chart created between last Wednesday’s $2.18 high andThursday’s $2.20 low. And once that early selling pressure driedup, the market was free to rally on waves of buying by both localand commercial traders. The May contract pressed higher throughoutthe session, spiking above the $2.30 level at the closing bellbefore settling at $2.299, a 7.3-cents advance on the day. Atechnical difficulty at Nymex last night suspended the after-hourscomputer-only Access trading session.

For the second day in a row, the natural gas futures market wascaught in tug of war as traders weighed their options-either buyinto the recent rally or sell, expecting a return to thelong-standing downtrend. The indecision could be seen inyesterday’s price action where prices trended higher in the morningonly to turn sharply lower in the afternoon. The May contractfinished 4 cents lower at $2.096.

For the second day in a row the futures market openeddramatically higher en route to posting a $2.08 daily high in thefirst hour of trading. And similar to Wednesday’s topsy-turvysession, no new buying was seen to help lift the May contract overresistance in the $2.07-09 area, which paved the way forprofit-taking activity yesterday afternoon. However in contrast tothe day prior, Thursday’s trading saw a late rally, which buoyedthe market into settlement and put a positive spin on the day’sevents. The May contract finished up 4.5 cents to $2.069.