Thanks

Thanks to stronger numbers throughout the Midcontinent and West, gains outweighed losses in a mixed cash market Wednesday. Much like the expiring April futures contract, many points didn’t stray very far from flat.

Thanks in large part to the extension of a key federal production tax credit (PTC) by the U.S. Congress through 2007, the U.S. wind power sector is experiencing phenomenal growth, with thousands of megawatts of the renewable resource being added to the country’s power grid.

Canada said Thursday that thanks to Hurricanes Katrina and Rita, the value of Canada’s exports and imports both hit record highs in September due to soaring outbound shipments of natural gas and inbound shipments of crude petroleum. Exports jumped 2.8% to a record C$39.8 billion, while imports rose a more moderate 1.4% to C$32.7 billion.

Due to fundamental influences remaining weak, eastern prices continued to fall at nearly all points, generally by large amounts. However, thanks to an infusion of cold and snowy weather across the Pacific Northwest and northern Rockies along with the removal of OFOs by California’s two biggest distributors (see Transportation Notes), western markets generally saw a mix of large and small rebounds from Friday’s across the board plunges.

Putting in a strong second quarter, thanks to two previous transactions, Occidental Petroleum Corp. said Friday that its net income for the second quarter 2005 was more than twice as much as the company’s net income for the second quarter 2004. For 2Q2005, Occidental posted net income of $1.536 billion ($3.82 per share), compared with $581 million ($1.48 per share) for 2Q2004.

Had the cold weather of the last couple weeks not arrived, the gas storage surplus compared to long-term historical averages would have swelled to “well over 500 Bcf.” As a result, gas market bulls have “dodged a bullet” at least temporarily, according to consultant Stephen Smith of Stephen Smith Energy Associates.

Natural gas now rules the oil patch in Texas, thanks to rising prices. Long viewed as the “oil patch,” a new study by the Texas Alliance of Energy Producers found that the dollar value of state gas production is actually three times as large as that of crude.

Factoring in the serious financial woes that continue to face its troubled NRG Energy subsidiary, Xcel Energy last week reported that preliminary earnings for 2002 tumbled deep into the red with a sobering net loss of $2 billion, or $5.26 per share, compared with net earnings of $791 million, or $2.30 per share, in 2001.

Congestion along the Midwest’s transmission lines remains a “serious issue” thanks to a lack of price signals continuing to hang over the region as a key barrier to new transmission projects, FERC staff said Wednesday. However, price signals in the Midwest are expected to appear two years from now when the region’s grid operator implements locational marginal pricing (LMP).