Sharp

Most of the cash market continued to see price increases Wednesday, although the gains were much smaller than those of the day before. A sharp pickup in tropical activity, highlighted by the formation of Tropical Storm Humberto off the Texas coast, and modest prior-day screen support were the main causes of further firmness, as cooling load remained light in most areas of North America.

The February futures contract plunged while going off the board Monday, taking a sharp 25.8-cent swan dive to settle at $6.917 after having posted a $7.33 high around 11 a.m. March ended the day down 22.1 cents at $6.937. Despite the severe cold across much of the nation, there remains significant uncertainty over longer-term weather forecasts and what may happen to the large storage surplus.

Recent sharp gas futures declines have undercut a second hedge fund in as many months. Greenwich, CT-based Amaranth Advisors LLC revealed last week that bad bets in natural gas futures have cost the company about 65% of its $9.5 billion asset value. Even more troubling is that other funds could follow, according to industry sources.

The widely held belief that speculators in the futures market were behind the sharp run-up in natural gas prices over the past year has no basis in fact, said Commissioner Sharon Brown-Hruska of the Commodity Futures Trading Commission (CFTC) last Tuesday.

The widely held belief that speculators in the futures market were behind the sharp run-up in natural gas prices over the past year has no basis in fact, said Commissioner Sharon Brown-Hruska of the Commodity Futures Trading Commission (CFTC) Tuesday.

Energy stocks have undergone a “very sharp, technically driven correction” in the past couple of weeks, but there should be a strong move upward through the end of the year because of higher natural gas prices this winter and upward earnings guidance for 2006, Raymond James’ energy analysts predicted in a new report.

The sharp reduction in the terms of new gas transportation and commodity contracts in recent years and the regulatory and market disincentives to longer-term contracting could delay much needed gas infrastructure projects, potentially costing consumers $653 billion in higher gas prices and price volatility over the next 15 years, according to a new white paper released by the Interstate Natural Gas Association of America (INGAA), which represents the nation’s gas pipeline companies.

The sharp reduction in the terms of new gas transportation and commodity contracts in recent years and the regulatory and market disincentives to longer-term contracting could delay much needed gas infrastructure projects, potentially costing consumers $653 billion in higher gas prices and price volatility over the next 15 years, according to a new white paper released by the Interstate Natural Gas Association of America (INGAA), which represents many of the nation’s major gas pipeline companies.

With the current sharp upswing in wholesale natural gas prices and the continuing prospect of further increases this heating season, the American Gas Association (AGA) on Tuesday said it plans to ask the Bush administration to open up areas of the federal Outer Continental Shelf (OCS) that are off-limits to oil and gas producers.