For the second day in row Wednesday, natural gas futures werelimited to small gains amid a quiet trading session. The Februarycontract finished up a penny at $1.827 in the regular tradingsession.
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Gulf, Appalachia a Bit Firmer, But Outlook Weak
Pipes in the Gulf Coast and Appalachia achieved small gains ofup to about a nickel Wednesday, but prices were falling back fromearly highs, leading some sources to doubt whether the cash markethas any more upticks in it for a while. Otherwise most pointscontinued the flat pattern of the previous day.
Small E&P Develops Coalbed Methane in KY
Miller Petroleum Inc. announced Monday that it finished thetransportation system for what it calls the first commercialcoalbed methane project in Kentucky. The Huntsville,Tennessee-based company completed and started service on a 4.5mile, six-inch pipeline extension that draws 200-220 Mcf/d fromfour coalbed methane wells located in southeastern Kentucky. Thegas, which the company said rates 980 Btu/Mcf, will be injectedinto the Columbia pipeline system and sold by a third party. Fortymore wells are scheduled to be drilled on this site in 1999. Thecompany estimates the finding cost for the project to average$.35/Mcf.
December Aftermarket Still Seeking Bottom
The meltdown of the early December aftermarket continued Tuesdayalthough many points made small rallies late in the day from theirbottom levels of the morning. Prices in nearly all production areaswest of Appalachia sank well below $1.50-a level in the “old days”at which many producers used to consider summer shut-ins. ThePG&E citygate was one of the only points still registeringquotes above $2.
East Accounts for Most of Small Price Declines
Mild softness dominated Monday’s cash trading in spite of a bigdrop on the futures screen. Drops of up to a nickel or so tended tocluster in eastern markets, where late-autumn weather is relativelymild. Meanwhile, flatness prevailed in much of the West as theNational Weather Service is predicting below-normal temperatureslater this week for the Rockies and interior parts of SouthernCalifornia.
Connecticut Modifies Penalty Rules
Connecticut regulators, bowing to pressure from marketers, havelowered penalty rates and delayed opening of the market for smallindustrials and large commercial customers of state LDCs until Jan.1.
Small Consumers Insulated from Power Market Aberrations
The power price spike to $7,000 MWh this past June in theMidwest was not out of line with the cost of running little-usedpeaking generators, according to a leading marketer, and from aregulatory viewpoint the key lesson was that residential customersdid not have to pay those prices.
NEB Boosts Canadian Pipeline Competition
The promised new era of competition is officially off andrunning in Canadian gas transportation after the National EnergyBoard approved a small project with large implications, AECSuffield Gas Pipeline Inc.
Increases Range From Small to About a Dime
A modest nudge from the futures screen and a warming trend inmajor market areas that had been unseasonably cool in recent dayswere enough to generate an overall upturn in cash prices Tuesday.The increases ranged from negligible to just over a dime in somecases.
Downtrend Skips a Beat; Futures Muster Small Gain
Mondays have been bear-traders’ favorite day of the week atNymex with the last five producing losses to start the week. Themarket looked poised to continue that trend yesterday, but strongerprices mixed with concerns the market is nearing the bottombolstered the September contract 2.5 cents for the day. That leftthe prompt month at $1.869.