With little in the way of fresh fundamental or technical direction, natural gas futures prices chopped sideways Friday as light short-covering and hot weather forecasts were tempered by lower cash market prices. The September contract worked its way higher throughout the first two hours of trading, but hit the skids late in the session as it fell to its settlement price at $2.858, up 1.6 cents for the session. Estimated volume was light, with only 58,581 contracts changing hands.
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S&P Cuts Dynegy’s Ratings, Citing ‘Erosion’ in Core Business
Standard & Poor’s Rating Services on Monday lowered its long-term corporate credit ratings of Dynegy Inc. and its subsidiaries to “BB” from “BBB-“, reflecting the company’s increased use of secured financing that “places the unsecured debtholders at a disadvantage.” The Houston-based company’s ratings also will remain on CreditWatch with negative implications. The “erosion in Dynegy’s core merchant energy business has become more pronounced,” S&P said of its rating. “Despite cutbacks in capital expenditures and costs savings, including a reduction in the common dividend payout, needed incremental cash flow has been slow to materialize.”
S&P Cuts Dynegy’s Ratings, Citing ‘Erosion’ in Core Business
Standard & Poor’s Rating Services on Monday lowered its long-term corporate credit ratings of Dynegy Inc. and its subsidiaries to “BB” from “BBB-“, reflecting the company’s increased use of secured financing that “places the unsecured debtholders at a disadvantage.” The Houston-based company’s ratings also will remain on CreditWatch with negative implications. The “erosion in Dynegy’s core merchant energy business has become more pronounced,” S&P said of its rating. “Despite cutbacks in capital expenditures and costs savings, including a reduction in the common dividend payout, needed incremental cash flow has been slow to materialize.”
Dynegy to Process NGL Production for Enterprise Affiliate
Dynegy Liquids Marketing and Trade has entered into a long-term agreement with Venice Energy Services Co. LLC (VESCO) to provide natural gas liquids (NGL) production with access to additional markets. VESCO, an affiliate of Enterprise Products Partners LP, processes gas production for producers in the central and eastern Gulf of Mexico. The limited partnership includes Enterprise, ChevronTexaco, Dynegy Inc. and Koch Industries.
Senator Decries FERC’s Hearing Order on Western Power Contracts
The Commission in April set the complaints for hearing, asserting that prices for long-term wholesale power in several contracts were the result of dysfunctional western markets and should be modified to reduce the prices of the contracts to current market levels (see NGI, April 15).
FPL Plans 1,900 MW of Gas-Fired, Combined-Cycle Power
Following through on its long-term objective of replacing substantial oil-fired generation with natural gas combined cycle power, Florida Power & Light outlined a new project to meet customer growth and increased use of electricity by expanding at its existing power plant sites in Martin and Manatee counties. The proposal would add 1,900 MW of new, cleaner-burning natural gas-fired combined-cycle generation by mid-2005 and follows similar actions at its Fort Myers and Sanford power facilities in 2000 and 2001.
While Continuing to Defy Gravity, Strong Futures Prices Attract Supporters
Amid the bullish combination of cold temperatures in the short-term outlook and warm temperatures in the long-lead forecast, natural gas futures rallied to their highest weekly close in five months Friday on continued short-covering by large speculative traders. The April contract received the biggest buying boost, trading 15.2 cents higher to close at $3.076. In doing so, it moved through resistance clustered at early-week highs in the $3.03-04 area.
UBS Warburg Energy to Lose Key Enron Traders
In what would certainly be a blow in at least the short term for UBS Warburg Energy’s push to revive Enron Corp.’s trading arm, some of the former trading powerhouse’s top traders are soon expected to leave. UBS confirmed last week that at least six of Enron’s former key wholesale energy traders, including the leading natural gas trader and the chief of the options desk, have turned down offers to stay, although most who were offered jobs are staying with UBS.
UBS Warburg Energy to Lose Key Enron Traders
In what would certainly be a blow in at least the short term for UBS Warburg Energy’s push to revive Enron Corp.’s trading arm, some of the former trading powerhouse’s top traders are soon expected to leave. UBS confirmed that at least six of Enron’s former key wholesale energy traders, including the leading natural gas trader and the chief of the options desk, have turned down offers to stay, although most who were offered jobs are staying with UBS.
Raymond James Cuts Near-Term Price Forecast, but Sees Recovery Ahead
After having one of the more bullish gas price forecasts on Wall Street, Raymond James is changing its tune because there’s a good chance this winter will be one of the warmest in history. The firm said Monday it was lowering its Henry Hub price forecast for the first quarter to $2.30 from $2.75 and its forecast for the second quarter to $2.80 from $3.25. Its forecast for the year was dropped to $3.25 from $3.50, but the firm expects a strong recovery in the last two quarters of 2002.