Seen

Natural gas consumption by the electricity sector, which was approximately 16 Bcf/day last year, is expected to grow by as much as 2 Bcf/d annually during 2002 and 2003, according to an analysis conducted by Houston-based Simmons & Co. International.

Buoyed by stronger cash market prices driven by a storm bisecting the country Thursday, natural gas prices floated higher throughout the session as traders cautiously covered short positions initiated in the month-long decline. The March contract finished at $2.138 and by virtue of its 5.8-cent advance secured its third straight up-day. There was less interest in the back months, which limited the 12-month strip to a 1.2-cent gain and $2.518 close. Volume was weak, with 75,990 contracts changing hands.

Mild weather seen in the Southeast and a softer U.S. economy were not enough to trip up Southern Co.’s 2001 earnings results as several factors, including continued customer growth and cost controls, helped the utility giant post earnings for the year of $1.12 billion, or $1.62 per share, compared with reported earnings of $994 million, or $1.52 per share, in 2000.

While not quite the “crash” that some had seen as possible, prices did fall substantially in Friday’s trading for the holiday weekend. Nearly all declines were between about a dime and 20 cents, but a few Northeast citygates took even bigger hits while Florida citygates were flat.

The cash market managed to keep up a mildly firmer facade Thursday, but prospects for a weekend crash are fairly strong, sources said. Yesterday’s quotes ranged from flat to either side of a nickel higher in most cases, with scattered points Transco Zone 6 (both pools), Transco Station 85 and MRT registering small declines.

With the exception of plunging Northeast citygates, softness was rather mild Thursday in other regions. Nearly all non-Northeast points ranged from essentially flat to down less than a dime. But several sources saw signs of much greater price weakness to come in today’s trading for the weekend.

Adding to the list of energy trading companies that have seen a sizeable jump in business since Enron Corp. filed for bankruptcy earlier this month, Sequent Energy Management, the wholesale marketing and supply arm of Atlanta-based AGL Resources Inc., said that its business volumes have risen nearly 300% since the energy giant filed under Chapter 11.

Non-performance of Enron-related gas did not appear to be a major factor in Monday’s price rebounds that were especially strong in the West. Replacement of purchases from Enron did play a part, sources said, but it was more a big Tuesday-only production outage in the Rockies and covering of short positions that sent post-weekend prices soaring by about 20 cents or more across the board. Opal quotes saw the biggest gain by far of more than 80 cents, according to one source.

Following the wide variety of temperatures seen across the nation during the Thanksgiving weekend, Salomon Smith Barney Meteorologist Jon Davis said the temperature pattern during the rest of November and the first few days of December is expected to be “normal,” which he allowed is something that much of the U.S. has not experienced this month.