Trends

A day after major cash market losses that exceeded a dollar in some cases, traders stanched the hemorrhaging to some extent Wednesday with mixed price movement that mostly was a dime or less up or down from flat. Late quotes were rising, which a couple of sources attributed to short squeezes.

Even before the Energy Information Administration came out with a 102 Bcf storage injection number that was being called the largest post-Labor Day weekly refill ever, the cash market mood was bearish Thursday. Losses at most points were in double digits, with an overall range between about a nickel and nearly 20 cents. The West saw most of the larger declines.

Perhaps countering some current trends among other United States energy interests, San Jose, CA-based Calpine Corp. talked bullishly Thursday about Canadian energy prospects. An income fund tied to the power plant developer/operator’s Canadian projects spewed more than $12 million in cash for the first quarter, and separately a Calpine Canadian official indicated the company intends to take a bigger stake in Canadian natural gas properties longer term.

Indicative of industry-wide trends in the same direction, Rosemead, CA-based Edison International’s senior executives told financial analysts Tuesday that the energy holding company is staking its future on restoring its traditional utility operations to full financial health.

Just as it seemed Georgia’s deregulated natural gas marketer list was ready to shrink by one more, the Georgia Public Service Commission said Tuesday that it has approved the application of Coweta-Fayette EMC Natural Gas Inc. to be a gas marketer. With the commission’s latest action, Georgia now has 10 certified gas marketers in the state.

As the natural gas industry revs up for the coming winter, Fitch Ratings said three industry trends will likely affect the credit quality of the U.S. natural gas pipeline sector in the near term. The negative overhang of ongoing parent company-level credit problems and liquidity issues, increasing regulatory scrutiny, and evolving counterparty credit risk could alter the outlook for U.S. natural gas pipelines, according to an article appearing in the latest Fitch Ratings Oil & Gas Insights newsletter.

After evaluating the purchasing trends of local distribution companies (LDCs) during the 2001-2002 heating season, the American Gas Association (AGA) said it believes longer term supply contracting may assume more importance in the future.

Using historical trends and assuming the once-prolific Ladyfern production remains flat, Canadian natural gas production through 2002 will be down between 1% and 2% from last year, according to research by Lehman Brothers’ energy and power analysts. The downtrend this year compares with the 6% annual increase experienced in 2001. At the same time, Canadian demand was up 2% year-to-date April over the same period a year ago.

All of the climate trends pointed to this past winter as being especially cold, and the warm weather completely “baffled” one of the leading meteorologists in the country. However, the warm outcome only pointed to how difficult long-term seasonal forecasting is and how much is still being learned in making predictions, said Jon Davis, the chief meteorologist for Salomon Smith Barney on Wednesday at the GasMart/Power 2002 conference in Reno.