Similar

Deja vu? Similar to last Monday’s market, rising cash prices Friday derived much of their support from previous-day futures strength. They certainly weren’t getting much benefit from weather fundamentals. Although high temperatures in the 90s and above continued to reign from the western Gulf Coast through the Midcontinent, desert Southwest and Rockies into parts of the Upper Plains, those conditions were largely unchanged from Thursday. The key Midwest and Northeast market areas remain unusually mild for early August.

Standard and Poor’s Rating Service (S&P) on Thursday warned in a report titled “Risky Business: Selling Retail Electricity in the U.S.” that many retail marketers are in the same boat as wholesalers with significant market risk because of volatile prices and switching customers, operational challenges such as mass billing and collections, and weak credit.

In a move remarkably similar to the December 2000 rally to $10, natural gas futures accelerated their move higher Monday as cold weather forecasts and double-digit physical prices prompted waves of panic buying at Nymex. After extending past psychological resistance at $7.00 late Sunday night in computer-only Access trading, the March contract exploded to a new 25-month high at $9.20. It closed just off that level at $9.137.

Cleco Corp. last Thursday said that it has identified so-called “round trip” trades, as well as transactions that may have violated affiliate regulations established by FERC and the Louisiana Public Service Commission (PSC), after a review initiated by its board of directors of certain energy trading activities over the past three years.

Following similar action taken by Moody’s Investors Service earlier in the week, Standard & Poor’s Ratings Services (S&P) said Thursday that it lowered its corporate credit rating on Peoples Energy Corp. to “A-” from “A+” with a current outlook of stable. The agency noted that Chicago-based Peoples Energy has about $946 million in outstanding debt. In addition, S&P lowered the corporate credit rating on Peoples Energy’s Peoples Gas Light & Coke Co. subsidiary to “A-” from “AA-“.

Following similar action taken by Moody’s Investors Service earlier in the week, Standard & Poor’s Ratings Services (S&P) said Thursday it is lowering its corporate credit rating on Peoples Energy Corp. to “A-” from “A+” with a current outlook of stable. The agency noted that Chicago-based Peoples Energy has about $946 million in outstanding debt. In addition, S&P lowered the corporate credit rating on Peoples Energy’s Peoples Gas Light & Coke Co. subsidiary to “A-” from “AA-“.

Pacific Gas & Electric issued a systemwide Stage 2 high-inventory OFO for Saturday, one day after it had lifted a similar OFO that had been in effect Wednesday and Thursday. However, this time the OFO carried a much more stringent imbalance tolerance of zero, but penalties remained the same at $1/Dth.

Similar to other recent forays above the $3.00 mark, Wednesday’s price surge in the natural gas pit at Nymex was short-lived as locals and speculative accounts liquidated new longs and reinitiated short positions. After topping out at $3.04 at 10:15 a.m. EDT, the September contract shuffled lower throughout the session, ending down 6.5 cents at $2.91. Estimated volume was moderate, with 93,329 contracts changing hands.

To energy analyst Marshall Adkins of Raymond James, it is becoming clear that the United States is facing a “major natural gas supply problem that is likely to lead to higher gas prices over the summer and a potential gas price explosion next winter.” Adkins, who last month had predicted a bullish first quarter sequential decline of 2% and year-over-year decline of 3%, said last week that not only is U.S. gas production falling faster than analysts first thought, but “the supply deterioration has been shocking even to us.”