Thursday

The June Nymex contract showed what hefty storage activity cando to the market by falling 7.7 cents to settle Thursday at $2.221The only good news for bulls is that the contract managed torebound after briefly falling below major support at the $2.160level. “The market has been wounded. People ignored the storagenumbers for too long, but they can’t ignore them anymore. The 345Bcf surplus is the largest we’ve had this year, and we’ve had fourstraight weeks where we’ve added to that surplus,” an analyst toldGPI.

PacifiCorp is throwing in the towel in its pursuit of Britain’sThe Energy Group (TEG) with the announcement it will not increaseits revised offer for the company. Energy Group Thursday recommended shareholders accept the 4.45 billion pounds ($7.4billion), 840 pence/share, cash offer made by Texas Utilities forthe company. “The Texas Utilities Offer represents excellent valuefor our shareholders and we recommend that they accept,” said DerekBonham, Energy Group chairman.

The May Nymex contract continued its spirited dive into lowerterritory Thursday by falling another 7.0 cents to settle at$3.328. May has now lost nearly a quarter since Tuesday, andestimated volume has totaled more than 250,000 contracts over thelast two days. “The amount of trading volume has been incredible.Of course, open interest had been at an all time high, so theseheavier trading days should be expected. Much of this is the workof speculative funds who continue to take profits and exit theiropen positions ahead of May’s expiration next Tuesday,” a sourcetold GPI.

The April Nymex contract slipped 2.7 cents to $2.338 onThursday, as traders continue to limit trading to small rangesahead of the expiration of the April contract at 3:10 EST latertoday. April remains several cents above $2.30 despite Henry Hubcash prices that are currently a nickel cheaper

The April Nymex contract gained another 6.1 cents to $2.300 onThursday, as the contract continued to move higher following thebreakout from its recent technical trading range. Despite thestrong rally and heavy estimated volume of 72,113 contracts, theupsurge stopped just short of breaking through its next resistancelevel at $2.305.

A new step was added Thursday to the elaborate tango of WesternResources and Kansas City Power & Light as the companiescontinue their attempt at a union. Western and Kansas City Power& Light (KCPL) restructured their merger agreement, forming anew electric company. The new company-to be named WestarEnergy-will be headquartered in Kansas City, MO, and traded on theNew York Stock Exchange. The announcement met with early approvalfrom at least one analyst.

The April Nymex contract finally broke out of its recent tradingrange by falling a relatively large 8.7 cents to $2.141 onThursday. “Today was massive long liquidation by funds, coupledwith weaker cash prices,” a broker told NGI. “The market droppedbelow the magic 40-day moving average (at $2.205), and fell belowtrendline support at $2.19. Both those things triggered a series ofstop loss orders, which helped propel April even lower. April lookspretty negative on the charts. There was a lot of technical damagetoday. The market will most likely want to continue to test thedown side,” he said.

Transwestern said its La Plata compressor station will be downthrough Thursday, March 5, for construction. There will be zerovolumes flowing from the Ignacio area to the Blanco Hub.Interconnects affected are NWPL-La Plata, WFS Ignacio Plant, andAmoco Florida River Plant. Capacity from the Blanco Hub to Thoreauwill remain at 800,000 MMcf/d. The same scenario also will applyMarch 28 through 31, Transwestern said.

Florida Gas Transmission said Thursday it was experiencing”extremely high” linepack and that Operational Flow Orders would beissued to customers taking less than scheduled volumes. Otheroperational tools such as an Alert Day notice were also beingconsidered, the pipeline said.