Struggled

July natural gas futures struggled to make it to the “plus” column Tuesday, but in spite of the firm finish short-term traders are anticipating a period of weakness before any further market advance. At the close July added 1.9 cents to $12.952 and August tacked on 1.8 cents to $13.055. July crude oil skidded 60 cents to $134.01/bbl.

Tuesday’s late expiration-day spike of September futures had limited success in rallying the cash market Thursday. It struggled against the negative influences of generally moderate late-August weather throughout the northern U.S. and Canada, the lack of any new tropical storm activity and the prospects that Tropical Depression Ernesto will be dampening potential power generation load along the East Coast.

Two South Dakota-based energy holding companies that have struggled at times in recent years are in play for a “strategic combination” proposed by Black Hills Corp. in a stock-for-stock merger with NorthWestern Corp.

Volatility has dwindled in the gas futures market, and traders struggled to find direction Wednesday without much success. The April contract was weak in the morning, strong midday with a daily high of $5.45 just before noon and then weak again in the afternoon ending the day down 6.1 cents at $5.278.

Duke Energy’s third-quarter earnings plunged 71% from a year ago, as the company struggled with a drop in energy costs, the collapse of the merchant energy business, problems in California, pull-outs in planned generation projects and severance costs from layoffs. But as if that was not enough, Duke revealed Thursday the Securities and Exchange Commission’s (SEC) inquiry into the company’s round-trip trading practices has been elevated to formal status. This is on top of the investigations already being carried out by the Commodity Futures Trading Commission (CFTC) and a Houston grand jury, which subpoenaed Duke over the summer for information on its bogus trading activities (see Daily GPI, July 15).

While many energy companies struggled financially in the third quarter, Kinder Morgan clearly did not. The fee-based liquids and gas transportation and terminals businesses of Kinder Morgan Inc. (KMI) and its master limited partnership, Kinder Morgan Energy Partners LP (KMP), posted more than 35% earnings growth.

The September gas futures contract found its footing on Tuesday after Monday’s 18-cent stumble, but struggled to gain much ground in a relatively quiet trading session. The near-month contract ended the day up 3.8 cents to $2.716 with a high of $2.745 and a low of $2.690. October rose 3.5 cents, and the winter strip inched up to $3.436.

As several competitors struggled for their very survival last week, Duke Energy reported earnings rose to 57 cents per share in the second quarter from 54 cents a share a year ago, due to hefty profits in the company’s gas pipeline business, which it said offset lower results for its sagging merchant energy business. Wall Street responded favorably to the news, with Duke Energy stock gaining about 27% in value for the week to trade at $22.45 a share late Friday.

As several competitors struggled for their very survival Tuesday, Duke Energy reported earnings rose to 57 cents per share in the second quarter from 54 cents a share a year ago, due to hefty profits in the company’s gas pipeline business, which it said offset lower results for its sagging merchant energy business. Despite the upbeat report, the company’s stock fell slightly to $19.06 a share in late-day trading.