The anticipated big price drops for the Memorial Day weekendshowed up on schedule Friday everywhere except in Canada. Declinesof a dime or more were common at nearly all points. Only theAppalachian pipes and a few in Louisiana managed to hang on over $2in the producing areas. Chicago and Michigan citygates fell about15 cents into the mid to high $2.00s, and Northeast citygates weredown about a dime into the low to mid $2.20s.
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The cost of PacifiCorp’s failed attempt to buy Britain’s TheEnergy Group showed up in its first quarter earnings report. Thecompany reported first quarter 1998 earnings on common stock of$104 million, or 35 cents/share, excluding $70 million charge forU.S. job cuts, and a $54 million charge for the terminated bid forEnergy Group. Including these charges, the Company reported a losson common stock of $20 million, or 7 cents/share.
The June Nymex contract showed what hefty storage activity cando to the market by falling 7.7 cents to settle Thursday at $2.221The only good news for bulls is that the contract managed torebound after briefly falling below major support at the $2.160level. “The market has been wounded. People ignored the storagenumbers for too long, but they can’t ignore them anymore. The 345Bcf surplus is the largest we’ve had this year, and we’ve had fourstraight weeks where we’ve added to that surplus,” an analyst toldGPI.
As expected, Consolidated Natural Gas’ (CNG) decision to exitthe wholesale marketing business showed up in first quarterresults. Warm weather and lower wellhead prices also took some ofthe blame for the reduced earnings. CNG reported 1998 first quarteroperating income down $35 million, or about $0.31/share. Net incomewas down $94 million, or $0.92/share.
April swing prices showed even more strength Wednesday than theyhad in Tuesday’s trading for April Fool’s Day flow. Double-digitincreases were the order of the day at almost trading point.However, it appeared that numbers may have peaked for now sincesources reported that late deals were falling in most markets.That portends softening quotes today, they said.
What if they had a customer choice pilot and nobody showed up?So far, about 18 marketers have expressed interest in ConsumersEnergy’s statewide Gas Customer Choice pilot in Michigan. However,only one has said it might solicit residential customers, accordingto Consumers, and at least one other, mc2, is balking at thepilot’s requirements. Consumers certainly doesn’t expect awash-out, but whether many customers actually get a choice isextremely doubtful. Beginning April 1, up to 100,000 Consumerscustomers are to be able to choose their supplier during the firstyear of the program. Customers and suppliers may enter the programat any time during the year. The pilot is to run three years,offering choice to 100,000 per year.