Smaller

Except in the Rockies and Southwest, prices kept rising Tuesdaybut not nearly as spectacularly as on the day before. Californiawas still registering triple-digit increases, but otherwise, mostpoints went up between a nickel and 15 cents. The Pacific Northwestand Northeast citygates saw most of the non-California gainsgreater than 20 cents.

The cash market showed signs of fatigue Wednesday in strugglingto maintain this week’s upward momentum. Most new gains were in the5-15 cents range, and some western points were beating modestretreats. However, cash may get its second wind today after thescreen reacted quite bullishly to AGA’s first report of net storagewithdrawals this season.

Gulf Canada Resources is expecting to more than double its dailygas production by swallowing rival Crestar Energy in aC$1.7-billion ($1.1-billion) friendly cash and stock transaction,excluding C$565 million in debt assumption. The combination willform a top-five Canadian independent production company with plentyof room to grow.

Gulf Canada Resources is expecting to more than double its daily gas production by swallowing rival Crestar Energy in a C$1.7-billion ($1.1-billion) friendly cash and stock transaction, excluding C$565 million in debt assumption. The combination will form a top-five Canadian independent production company with plenty of room to grow.

The Gulf of Mexico’s shallow basin is a “great place” forsmaller independents now and into the future, according to threewho should know. Executives with three of the best performingindependents say their companies will continue to focus nearly allof their attention on finding natural gas in the shallow offshoreareas of Texas and Louisiana.

Except for smaller price increases, cash trading Tuesday wasalmost a repeat of Monday’s. Small upticks of about a nickel orless dominated in the East and were mostly associated with thescreen’s late run-up Monday, sources said. Slightly larger gains atmost western points got extra support from cooling load that wasconcentrated in the hot east-of-California markets of the desertSouthwest.

That softening that everybody was expecting in vain since thestart of last week finally showed up to start off this week. Mostdeclines were in the neighborhood of a dime but generally were lessthan that in the West, especially California, and much greater thanthat at Northeast citygates.

Fueled by a smaller than expected storage injection figure,natural gas futures continued higher yesterday morning asspeculative buying easily erased the Wednesday evening price dip.The buying pressure continued throughout much of the day as bullshad their sights squarely set on last week’s high of $2.72. Theirpersistence paid off, and shortly after 1 p.m. the prompt monthpunched through and notched a $2.75 high on the day. However, notenough follow-through buying was seen entering the market, and theresulting sell-off deposited prices back down near unchanged forthe day. The August contract finished just a half-penny higher at$2.647.

Producers are eating a bigger slice of the revenue pie,pipelines claim. Pipelines, however, are piling up a much greaterreturn for a much smaller investment, producers retort. And that’sjust the beginning of the arguments spawned by FERC’s probing thepossibility of lighter-handed regulation of pipelines, includingnegotiated terms and conditions.