Surrounding

Allowing that much is still unknown surrounding the $6 billion downfall of hedge fund Amaranth Advisors LLC, veteran energy analyst John Olson of Poole Capital Partners LLC said it appears the fund tried to dominate the market by taking enormous position sizes. In Washington, DC, calls for regulation of over-the-counter trading continued.

As reports and rumors continue to swirl surrounding news of Amaranth Advisors LLC’s significant losses last week, calls for better regulation continue to come in while trading exchanges attempt to assure the public that they were not adversely impacted. The Greenwich, CT-based hedge fund revealed last week that bad bets in natural gas futures have cost the company about 65% of its $9.5 billion asset value (see Daily GPI, Sept. 22; Sept. 25).

October natural gas futures started the morning lower as traders were exploring sub-$5 prices again Wednesday while news surrounding the losses at hedge fund Amaranth Advisors LLC continued to unfold (see related story). After recording a low of $4.850 in morning trade, traders put in a high of $5.040 in the afternoon before the October contract settled at $4.931, down 7.5 cents on the day.

With more questions than answers surrounding Greenwich, CT-based Amaranth Advisors LLC’s significant losses due to a slumping natural gas market, Connecticut Attorney General Richard Blumenthal reiterated Tuesday his long-standing call for more oversight of hedge funds in general.

Uncertainty surrounding a long-term contract with bankrupt Calpine Corp. and a pending rate case leaves Kern River Gas Transmission Co. with a question about its future credit outlook, albeit with a current relatively high “A-” rating and the ultimate backing of its parent company, Berkshire Hathaway’s utility unit, MidAmerican Energy Holdings Co., according to Standard & Poor’s Ratings Services. S&P Monday affirmed the “A-” rating on senior secured debt of Kern River’s funding arm, Kern River Funding Corp, Salt Lake City.

While offshore LNG projects in the Northeast may raise other environmental concerns, the issues surrounding the open rack vaporization (ORV) process, which consumes hundreds of millions of gallons of water daily to warm super cooled LNG back into a gaseous state, won’t be among them, project sponsors say. Both the Neptune project, sponsored by Suez Energy, and the Northeast Gateway project sponsored by Excelerate, will use a closed loop process.

Helped lower by sagging crude oil futures and doubts surrounding just how cold the coming “cold front” will be, March natural gas futures started Tuesday’s session more than 10 cents lower than Monday’s close and continued lower into territory not seen since last summer. The prompt month put in a new front-month low before settling at $7.858, down 13.7 cents from Monday’s finish.

While making public early rejections and a stalemate surrounding confidential agreements, Rapid City, SD-based Black Hills Corp. Friday continued to appeal to NorthWestern Corp.’s board in an effort to kick-start merger talks between the two utility holding companies in South Dakota. In its latest formal letter to the NorthWestern board, Black Hills said it can’t be unreasonably constrained from pursuing what it views as a perfect strategic marriage of companies.

After trading higher in Nymex’s overnight Access session, November natural gas on Tuesday continued to rebound from its recent dip. Fears surrounding continued shut-ins, tied together with concerns about the impending winter, pushed the prompt month higher on the day to settle at $13.519, up 54.4 cents from Monday.