Thursday

The futures market traded lower for most of the day Thursdaybefore cratering in the last 10 minutes of the trading session,leaving the market at its lowest level in years. The Septembercontract plumbed the lowest of any of the contracts, printing lowsat $1.61 just after 3:00 EST. However, an average of all tradesduring the last 30 minutes produced a final settlement of $1.672, a9-cent loss for the day and 27.5 for the week.

Cash prices finally turned downward Thursday, a day later thanseveral sources had expected. Even with the futures screen staginga modest rally, cash traders were unable to ignore the previous twodays’ weakness in the Nymex pit, the continuing lack of weatherfundamentals and yet another bearish storage report that once againemphasised how close injection demand is getting to disappearing.

Canadian prices were strong Thursday, but it was a verydifferent market south of the border. Nearly all U.S. points werefalling between a nickel and a dime in what several sources agreedwas a “very quiet” trading day near the end of a quiet tradingweek. One marketer said he thinks everybody in the industry wantsto go play golf and say, “See you Sept. 1.”

In the wake of last week’s Oklahoma Corporation Commission (OCC)order on upstream unbundling, an appeal filed Thursday by OklahomaNatural Gas (ONG) promises to at least put a damper on upstreamcompetition and possibly delay it while the case winds through thecourt.

The futures market shrugged off the latest AGA storage reportand made modest gains Thursday in a session notably devoid of freshnews. The August contract was limited to a narrow 5-cent range,settling up 1.4 cents to $1.948.

The August natural gas futures contract slipped 1.1 cents to$2.439 Thursday, as traders scrambled to finish their businessahead of the long fourth-of-July weekend. “Today was pretty muchjust position covering ahead of the weekend,” a broker told GPI. “Idon’t think anyone was too concerned with, or had the goal of,moving August outside of its trading range,” he said. For thatreason, he was not surprised to see technical support at $2.38hold.

The Georgia Public Service Commission (PSC) issued rulesThursday to give Atlanta Gas Light (AGL) customers supplier choice.Georgia will be the first state in the nation to fully open the gasmarket to competition at the residential level.

In an unusual move Thursday, the Senate Energy and NaturalResources Committee forwarded the nomination of FERC CommissionerWilliam L. Massey to the full Senate for approval immediatelyfollowing his confirmation hearing.

The House Subcommittee on Energy and Mineral Resources Thursdayapproved royalty-in-kind legislation (H.R. 3334) to require thefederal government to take the actual oil or natural gas product asits royalty payment instead of cash for production offshore and onfederal lands. The bill, opposed by the Interior Department’sMinerals Management Service (MMS), included an amendment whichwould allow the government to receive cash for production fromlow-volume producing wells in remote locations.