Shifted

Pulled down by another in a string of bearish weather outlooks, the natural gas futures market shifted back to the downside Wednesday, rescinding a majority of the gains notched in Tuesday’s session. Caution ahead of Thursday’s release of fresh storage data also contributed to the price decline, with weak longs electing to cash out on Tuesday’s gains ahead of the inventory report.

Volumes and prices for spot market wholesale electricity purchases by California’s Department of Water Resources (DWR) shifted upward over the last two months of 2002, according to statistics released Tuesday by DWR’s Sacramento office. Spot purchases exceeded 1 million MWh (1.056 million MWh) in December, 2002, at an average cost of $43/MWh, in contrast to the previous month when spot purchases hit 906,000 MWh, at an average cost of $38/MWh.

The spotlight quickly shifted Friday from the sharp prices declines, which were due to reduced weekend demand and milder weather, to the American Gas Association’s announcement that it will stop publishing its weekly natural gas storage statistics at the end of the year.

Southern Company Energy Marketing’s new president, GaryMorsches, shifted some personnel around yesterday to optimizeperformance. John Ragan, formerly west regional vice president,becomes east regional vice president. He also will oversee SCEM’scommodities group, which handles trading in coal, emissionscredits, weather derivatives and pulp/paper markets. Bill Orr,formerly northeast regional vice president, becomes west regionalvice president. Jay Catasein, project development vice president,becomes northeast regional vice president. Ron Erd is promoted fromdirector to vice president of market development. In addition toresponsibility for market development and structuring, Erd willassume responsibility for the project development group. SCEM is ajoint venture between Southern Energy Inc. and Vastar ResourcesInc.

Apache Corp. dramatically grew its asset base and shiftedattention away from its poor first quarter financial performancelast week by buying 22 fields in the Outer Continental Shelf of theGulf of Mexico (GOM) from Shell for $715 million and one millioncommon shares of stock. The acquisition will go into effectretroactive to March.

Geographic price tendencies shifted going into the weekend.Western markets, which had been resisting the week’s overallsoftness earlier due to heavy cooling load andsupply/transportation problems, were being routed Friday,particularly at the California border. Meanwhile Eastern pricesfell by a nickel or less in most cases, with Appalachian pipes andNortheast/Midwest citygates flat or close to it.