“It just goes to show you. This gas market doesn’t make muchsense,” a marketer said. Her comment reflected the chagrin of manytraders Thursday when late-January cash prices tended to firm by upto a nickel instead of falling as generally expected. Most sourceshad been sure Wednesday that the anemic storage withdrawal figurereported by AGA (92 Bcf) would lead to cash softness. Sourcesprofessed to have no clue as to what was propping up prices in theface of no fundamental support, although one suggested the strongFebruary futures close might have given cash a psychological boost.
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Timid Futures Show Slight Drop
Here today; gone tomorrow was the prevailing mentality in thefutures arena yesterday when the coldest temperatures of the yearwere more than offset by forecasts calling for a warm-up by earlynext week. And as has been the case for most of the month, it wascash prices that not only led the way for the futures market, butalso notched a larger change on the day-where the January contracttrickled down, 2.2 cents to settle at $1.925, cash prices sank by adime on many pipes.
Polls Show CA Prop 9 Losing Ground
California’s statewide electricity ballot referendum that wouldturn back parts of the state’s ongoing power industry restructuringis losing by a bigger margin in the latest nonpartisan FieldInstitute survey, but the percentage of undecided voters (36%) isstill large, according to political polling experts.
Enron, Columbia Still Paying for Retail Build-Up
Third quarter earnings of both Enron Corp. and Columbia EnergyGroup continued to show the costs of building up a retail marketingpresence. Both companies reported losses in their retail businessesin earnings reports.
Prices Show Little Indication of New Direction
Prices began the week with a mixed performance Monday. Flatnesswas dominant at most points, with small drops outweighing smallgains at others. Mild weather throughout much of the nation lent nofundamental support to gas demand. However, sources saw a goodchance for at least modest increases today based on Monday’sfutures uptick.
Futures Rebound to Show Gain for the Week
The futures market moved quietly higher in fairly subduedtrading on Friday until a round of position squaring and freshbuying boosted the market before the close. That was enough topropel the September contract above its recent trading range tosettle at $1.877, a 6-cent advance on the day.
Producers Say FERC Gas Rulemakings Show Promise
Major gas producers said they were “encouraged” by FERC’sproposals to remove the price caps on capacity in the short-termmarket and to give pipelines the authority to negotiate terms andconditions of service subject to certain restrictions.
Storage Operators Confirm Rapid Injection Pace
Storage statistics show the industry is heavily into squirrelingaway its nuts for the winter. Some traders watching robust storageinjections have questioned the validity of AGA-reported figures,but storage operators say, “Yes, Virginia, there really is thatmuch gas in the ground.”
Majors’ 2Q Earnings Show Strain From Oil Prices
Weak oil prices were the bane of three major producers reportingsecond quarter earnings so far. Depressed crude prices were blamedfor second quarter and 1998 first half results significantly offfrom year-ago periods. At least one company said it may refigureE&P expenditures should the low prices persist. Gas prices alsowere off in most cases but less so than oil.