Themselves

How low can you go? Some traders likely were asking themselvesthat very question Wednesday afternoon after seeing cash pricescrater by about 20 cents or more at nearly all points that morningand then watching the screen go into a swoon immediately after theAGA storage report, which means the cash market is expected toregister big losses again today.

The Senate Energy and Commerce Committee debated yesterdaywhether to get themselves off the hook for this summer by enactingstopgap electric reliability legislation or go for the gold of acomprehensive electric restructuring bill.

FERC’s marketing affiliate rule, which hinges on the hope thatpipeline owners will police themselves, has been about as effectiveas a wolf guarding a henhouse, says a Washington D.C. lawyer whorepresents producers and independent marketers. Because ofescalating abuses in the market, he believes overhauling Order 497should be the first priority of the Commission in its post-Order637 dialogue with the natural gas industry.

With little to no change in influences from Monday, cash pricessaw little reason for change themselves Tuesday. The result was agenerally flat market, but small declines outweighed the fewup-ticks.

After a choppy week of range-bound trading, bulls foundthemselves in the driver’s seat Friday at the New York MercantileExchange when weather forecasts and technical factors came intoagreement. Given the opportunity it didn’t take long forspeculators, comprised mostly of local traders, to become buyers inan attempt to push the August contract through resistance tobuy-stop orders that they knew were waiting in the $2.21-22 area.However, what they failed to realize was that there wasconsiderable commercial selling waiting there as well, it proved tobe more than enough to satiate the buying demand. The Augustcontract notched a $2.225 high shortly after 1 p.m. (EST) only tocome crashing back to settle at $2.187, an 0.8-cent advance for thesession.

Industrial gas customers yesterday endeared themselves topipelines that are trying to build new capacity into the Northeastmarket, calling on FERC to give the go-ahead to any and allprojects that meet “some basic standards.” Major gas and powerproducers, however, urged the Commission to first encourage pipesto use existing capacity more efficiently before doling outcertificates for new lines. They also proposed that pipelines berequired to assume more risk for their projects to protect shippersagainst “unnecessary” construction.