Strip

Natural gas wellhead deliverability is weaker than many observers realize, and the natural gas futures strip is undervalued, according to Kevin Petak, director at Arlington, VA-based consulting firm Energy and Environmental Analysis Inc. (EEA). Petak believes $5 Henry Hub gas prices will arrive very soon — most likely in January or February — and prices should average $5.35 next year.

Natural gas wellhead deliverability is weaker than many observers realize and the natural gas futures strip is undervalued, according to Kevin Petak, director at Arlington, VA-based consulting firm Energy and Environmental Analysis Inc. (EEA).

As two of its largest Las Vegas Strip casino/hotel customers seek their own electricity supplies, Sierra Pacific Resources’ Nevada Power Co. last week paid off about $100 million in delayed wholesale power bills to 10 suppliers that didn’t terminate agreements with the southern Nevada utility. Terminated agreements are still unsettled with at least two suppliers reportedly seeking more than $60 million in contract cancellation charges.

The California Independent System Operator’s emergency motion seeking to strip several major California generators of their market-based rate authority should be rejected, given that FERC already has granted many of the remedies sought by the Cal-ISO in its recent price-mitigation order, generators said. Moreover, they contend the Cal-ISO hasn’t provided an iota of evidence to show that they manipulated prices for power in the California market.

The California Independent System Operator’s emergency motion seeking to strip several major California generators of their market-based rate authority should be rejected, given that the Commission already has granted many of the remedies sought by the Cal-ISO in its recent price-mitigation order, generators said. Moreover, they contend the Cal-ISO hasn’t provided an iota of evidence to show that they manipulated prices for power in the California market.

After all the volatility surrounding the May Nymex contract oflate, the spot month spent what is typically one of any contract’smost volatile trading days (its expiration) by slipping only 0.4cents to settle Tuesday at $2.262. A trader said late strengthpushed June and the rest of the outmonths up a couple of cents forthe day, and noted May would have expired with a gain, had it notbeen for a fund dumping a large position within the last 30 minutesof trading.