Support

Even with futures no longer pointing out an upward path, the cash market continued to forge ahead Wednesday with new gains that remained mostly in double digits. As on the day before, a large majority of increases were between about a dime and 15 cents.

FERC Commissioner Nora M. Brownell pledged her support Wednesday for a Commission investigation into charges that Enron Corp. may have manipulated energy prices in California’s forward markets, saying the agency needs to “clear up [any] lingering doubt” about this before it can begin to build a “stable, predictable market” in the western state.

Driven by record 52% growth in 2001 — with generous support from its general partner — Kinder Morgan Inc. (KMI) reported Thursday it expects to have 10-15% growth through the year. Earnings were driven “significantly” by KMI’s ownership of the general partner of Kinder Morgan Energy Partners LP (KMP), which saw its earnings grow 59% from a year earlier.

The spell of rising prices based on little or no fundamental support finally was broken Wednesday. Price movement ranged from flat to about 15 cents down, with most declines between about a nickel and a little more than a dime. Western numbers tended to see the smallest losses due to a blast of colder than expected weather that prompted a low-linepack OFO by El Paso (see Transportation Notes).

California regulators, Pacific Gas and Electric (PG&E) and Southern California Edison have rallied in support of the FERC enforcement’s request for a separate investigation into whether El Paso Natural Gas withheld interruptible transportation (IT) service last winter to drive up natural gas prices in Southern California.

California regulators, Pacific Gas and Electric (PG&E) and Southern California Edison have rallied in support of the FERC enforcement’s request for a separate investigation into whether El Paso Natural Gas withheld interruptible transportation (IT) service last winter to drive up natural gas prices in Southern California.

Senate Republicans pulled out all the stops last week to get the Democratic leadership to move on energy legislation before the end of the session, and even vowed to tack on an energy bill to other legislation such as the economic-stimulus measure pending in the upper chamber.

Boosted by scaled-down buying support, the natural gas futures market rebounded from lows notched Monday morning. However, that buying was muted by a continued negative technical and fundamental outlook, and as a result the market finished in negative territory for the day. The November contract experienced the largest trading range Monday, as the prompt month rebounded to a $2.41 high after dipping down to $2.33 earlier in the session. It closed with a 5.2-cent loss to $2.378. By comparison, the rest of the winter strip was hit harder, led by December, which tumbled 6.5 cents to $2.66.

Natural gas production may have peaked in the third quarter and could begin to show “meaningful declines” in the fourth quarter, suggesting that the potential “to begin shutting in some higher cost, short-lived production is very real and could further reduce U.S. production,”according to last Monday’s Stat of the Week by the Raymond James Energy Group. The analysts noted that the “surprisingly quick supply response strongly supports our long-term bullish outlook for equilibrium Henry Hub natural gas prices of $3-$5/MMBtu.”