Trend

Marking the start of what many expect to be a major trend overthe next few years, a Florida county authorized the construction ofa 460 MW gas-fired facility earlier this week. The $100 millionplant, which will be built and operated by Reliant Energy, willstart service in the fourth quarter of 2001. The Osceola CountyCommission Board approved the plan by a vote of 4-1.

Feeding off late gains achieved Thursday, natural gas futuresrumbled higher Friday as traders continued to look past theoverwhelmingly bearish short- and medium-term weather outlook tofocus instead on the potential for higher prices this summer. Withthat upward bias, the March contract advanced 5.4 cents to settleat $2.603, just a fraction of a cent below the $2.61 Februarysettle, but nearly a dollar above the $1.666 March 1999 closingprice.

Despite the arrival of another severe winter storm — this onein the Midcontinent — the majority of spot points leaned to thedownside Thursday.

Building on Monday’s gains, natural gas futures inched higheryesterday as bulls received a boost from strength in the nearbycash market. After thwarting an early sell-off, buyers weresuccessful in bidding the February contract up 4.4 cents to closeat $2.26. That made it four for four trading sessions in which theprompt month has posted higher highs and higher lows.

Despite a trend toward milder weather in virtually all regions,the great majority of the swing market was seeing flat to slightlyhigher prices Wednesday. Considering the weather and little supportfrom a moderately higher Nymex screen, it must have been cash-outprices that kept late-December quotes from continuing to fall, onesource suggested.

This week’s uptrend in cash prices continued Wednesday butclearly showed signs of losing momentum. Several points in variousmarkets leveled off with flat showings, and the gains were small,generally less than 4 cents. PG&E citygates saw the day’s mostnotable decline of more than a nickel due to a high-inventory OFOby the utility that is effective today and carries a stringent 3%tolerance for positive imbalances.

Fresh off a 5-cent rally in Wednesday night’s Access session thefutures market bulldozed higher yesterday amid light speculativebuying. July finished its first day as the prompt month up 7.2cents to $2.282, after notching a $2.30 high early Thursdayafternoon. Estimated volume was heavy, with 85,664 contractschanging hands.

The trend among the top energy marketers appears to be that thebig movers continue getting much bigger while the smaller marketersare struggling to maintain previous sales volumes andprofitability, according to NGI’s marketing survey. The survey alsoindicates volume growth has very little correlation with financialperformance.

The demonstrative trend among the top energy marketers appearsto be that the big movers continue getting much bigger while thesmaller marketers are struggling to maintain previous sales volumesand profitability, according to NGI’s marketing survey. The surveyalso indicates volume growth has very little correlation withfinancial performance.