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A systemwide entitlement against overtakes that began Dec. 19 onNorthwest remained in effect going into the holiday weekend.Northwest said Wednesday it would continue to operate under a Stage1 entitlement at 3% because it had not seen sufficient improvementin system conditions. However, as of Wednesday the entitlement waslifted on points south of Kemmerer (WY) Station.

Although it was nowhere near as dramatic as the price move thatdeposited prices near all-time winter lows, last week’s futuresgains-slowly and steadily-were gaining the attention and acceptancefrom both technical and fundamental traders. And despite a largestorage surplus and continued uncertainty about winter weather, ifprices are able to trend higher into the New Year, the market willlook back at last week’s rebound as the end of the downtrend. Theprompt January contract chopped higher Friday, making daily highsby noon before softening into the closing to finish up a penny at$2.074.

The U.S. was getting colder Thursday, but that fact gave nosupport to cash prices, which mostly fell between a nickel and 15cents. A futures drop of less than a penny was too small to matter,sources said, but the second straight report of storage injections,combined with forecasts of warmer weather next week and a drop inJanuary crude oil futures to less than $11/barrel, was too much fortraders to ignore.

The four major gas trade associations that make up the NaturalGas Council (NGC) and two other industry trade groups were expectedto ask FERC late Monday for a second extension of the deadline forindustry comments on the major notice of proposed rulemaking (NOPR)and notice of inquiry (NOI) issued in July, industry sources said[RM98-10, RM98-12].

The Ohio Public Utility Commission reported that 280,000 retailconsumers are buying gas from alternative suppliers, a 25% increasesince September. The percentage of eligible customers participatingin the three utility customer choice programs has risen to 21%(34,644 residential and small commercial customers) on East OhioGas, 8% (30,979) on Cincinnati Gas & Electric and 17% (216,900)on Columbia Gas. In total, 24,127 commercial customers and 258,396residential customers are participating.

Oneok completed two reserve acquisitions totaling $54 millionwith estimated proven reserves that could exceed 75 Bcfe. Bothdeals are for primarily natural gas reserves in Oklahoma. Acash-for-stock agreement was made to acquire the privately heldOklahoma properties of Anderman Oil Corp., AOL Holdings Inc., andMohan Petroleum Oklahoma Inc. The purchase price is $28.5 million,subject to certain adjustments, with an effective date of Aug. 1,1998. Oneok also will acquire properties from St. Mary Land &Exploration Co. for $25.5 million, subject to adjustments, with aneffective date of Sept. 1.

Williams announced yesterday that its Cherokee expansion projecthas been placed into service, increasing capacity on theTranscontinental system by about 87 MMDth/d to provide additionalannual firm transportation capacity to serve markets in Georgia.

In a type of deal that is becoming increasingly popular amongmarketers selling to public entities, Aquila Energy has signed tosupply 91 Bcf over 12 years to municipal members of the NebraskaPublic Gas Agency for an advance payment of $162 million.

ARCO’s announcement last week that it will cut $500 million inexpenses and 900 jobs over the next two years was put inperspective yesterday when the company said third quarter earningsexcluding special items plummeted 81% to $61 million, or$0.19/share, compared to $313 million, or $0.96/share, in the thirdquarter of last year. Net income, including special items anddiscontinued operations, was $872 million, or $2.67 per dilutedshare, compared to $516 million, or $1.57/share in 3Q97.