Sources

The March futures contract lost 5.3 cents to settle Wednesday at$1.765, thanks to what sources believe was a combination of weaktechnical and fundamental factors. “Today’s drop in the Marchcontract was actually a response to a failure at the 18-day movingaverage for March of $1.824,” one trader said, although otherschimed in many people sold ahead of what they thought would be abearish AGA storage report. Sure enough, the actual report came inat 78 Bcf of withdrawals, which is “significantly” lower than the102 Bcf of gas withdrawn during the same period last year.

Enron Oil & Gas Co. said it expects 1998 all-sources netproved reserve additions of more than 1.6 Tcfe, resulting in areserve replacement ratio greater than 375%. The company’s 1998production is estimated to be 420 Bcfe, and 1998 average unitfinding cost is anticipated to be below 50 cents/Mcfe. Of thereserves added in 1998, about 800 Bcfe were added in Trinidad,300Bcfe in India and 500 Bcfe in North America.

Diversity of supply sources, a transportation network thatblankets nearly the entire state of Florida and strong customerties will give Florida Gas Transmission (FGT) the edge over newprojects – such as Williams-Transco’s proposed Buccaneer Pipeline- that plan to enter its territory to cash in on the growinggeneration market, says FGT President Rockford G. Meyer.

Diversity of supply sources, a pipeline infrastructure thatblankets nearly the entire state of Florida and strong customerties will give Florida Gas Transmission (FGT) the edge overcompeting pipelines-such as Williams-Transco’s proposed BuccaneerPipeline-that are planning projects into the state in an attempt tocapture a portion of the growing power generation market there,says FGT President Rockford G. Meyer.

The futures market concluded the week on a quiet note Friday asneither bulls nor bears were able to influence a move in theirfavor. After a lower open the November contract quickly filtereddown, filling in the chart gap to $2.35. But the $2.35 level held,and the market was left to trend higher into the closing bell. TheNovember contract settled at $2.432, a 1.8-cent gain on the day.

All sources were on the same page Tuesday regarding what waspushing cash prices upward. “Blame the screen,” they chorused,because there weren’t any fundamentals around at which to point.Just about every point was up between 10 and 15 cents, except forintra-Alberta increases of a little over a nickel.

Cash prices finally turned downward Thursday, a day later thanseveral sources had expected. Even with the futures screen staginga modest rally, cash traders were unable to ignore the previous twodays’ weakness in the Nymex pit, the continuing lack of weatherfundamentals and yet another bearish storage report that once againemphasised how close injection demand is getting to disappearing.

The futures market made gains for the second day in a rowTuesday on what many sources are calling a bit of a technicalcorrection in an otherwise down market. That left the Septembercontract hovering within striking distance of the downtrend linethat has thwarted upward momentum since July 9. September finishedup 2.6 cents to settle at 1.895.

Wednesday’s last-day plunge in June futures had cash sellersrunning scared, sources said. However, basis differentials did notappear to be changing much if any, a Gulf Coast producer said, sobidweek deals done prior to Wednesday afternoon will tend to beanywhere from 6 to 10 cents above the current market. He was makingsales Wednesday at $2.00-02 for Henry Hub and $1.99-2.00 forColumbia Gulf-onshore.