Rebounding from Thursday’s price free-fall, natural gas futures turned higher Friday as traders bought back their shorts on the idea that governmental weather forecasts calling for mild temperatures through the remainder of the winter may be inaccurate.
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Technicals Overcome Bearish Fundamentals to Push Futures Higher
Working off oversold conditions, natural gas futures turned higher Tuesday, as locals tried to pick a bottom, and trade and commercial sellers were slow to emerge. The end result was a 9.4 cent gain to $3.872 for the December contract, just a few ticks below its high for the session. Estimated volume was 65,897.
Buffett Adds CenterPoint to Energy Portfolio with $1.31B Loan
Warren Buffett, the “Omaha Oracle” whose knack for investment risk has turned a mighty profit for believers, added another energy company to his hefty portfolio on Friday, as Buffett’s Berkshire Hathaway Inc. and Credit Suisse First Boston (CSFB) agreed to loan cash-poor CenterPoint Energy Inc. $1.31 billion. The three-year loan, which carries a 12.75% interest rate, ensures CenterPoint will make a Nov. 15 deadline to pay off a $400 million facility, and more important, allow it to maintain a $4.7 billion credit facility.
Buffett, CSFB Rescue CenterPoint with $1.31B Loan
Warren Buffett, the “Omaha Oracle” whose knack for investment risk has turned a mighty profit for believers, added another energy company to his hefty portfolio on Friday, as Buffett’s Berkshire Hathaway Inc. and Credit Suisse First Boston (CSFB) agreed to loan cash-poor CenterPoint Energy Inc. $1.31 billion. The three-year loan, which carries a 12.75% interest rate, ensures CenterPoint will make a Nov. 15 deadline to pay off a $400 million facility, and more important, allow it to maintain a $4.7 billion credit facility.
Conflicting Fundamentals and Technicals on Hold as Market Eyes the Tropics
Stemming a three-day, 42.6-cent price slide, natural gas futures turned modestly higher Friday as traders covered shorts ahead of the holiday weekend. There also was the outside chance that tropical activity in the Atlantic and the Caribbean could present a threat to gas production in the Gulf of Mexico this week. The October contract gained 4.6 cents to close at $3.296. By comparison, the gains in the winter strip were larger, led by the January contract, which climbed 8.6 cents to finish back above the $4.00 mark at $4.029. At 50,980, estimated volume in the holiday-abbreviated session was weak.
Entergy CEO: Utility Won’t Jump Out of Choppy Trading Waters
Even though its energy trading venture turned in a less-than-stellar performance over the past few months, investors shouldn’t take that to mean Entergy Corp. is ready to join the growing list of power companies throwing in the towel on energy trading. When the dust finally settles from the current market upheaval, Entergy CEO Wayne Leonard sees the company’s trading operations as well positioned to take advantage of a “much deeper space” expected in the sector after the current shakeout.
FERC Stands By Quarterly Power Marketing Report Requirements
FERC last Wednesday turned aside several requests for rehearing of a recent move by the Commission to replace a number of reporting filings currently made by the power industry with a quarterly report detailing power sales transactions, among other things. The federal agency is hoping that this new approach to reporting will make U.S. power markets more transparent and provide a better means to detect and discourage discriminatory practices.
Wood Issues Stern Warning Over Lack of Candor Before FERC
FERC Chairman Pat Wood’s normally sunny demeanor quickly turned to one of agitation last Wednesday after Commission staff briefed him and other Commissioners on an order that directs Wisconsin Electric Power Co. (WEPCO) to explain apparent factual conflicts relating to the separation of control area and merchant function employees.
Futures Tick Higher as Traders are Cautious Ahead of Long Weekend
Stemming a two-day, 22-cent price erosion, natural gas futures turned modestly higher in an abbreviated pre-holiday weekend session Friday, as profit taking gave way to a steady stream of end-user buying. The March contract looked poised to hit the $2.12 low notched last Monday, but after sellers ran out of gas early Friday the way was paved for a positive close. At 1 p.m. Friday the March contract settled 2 cents higher for the day and 1.5 cents higher for the week at $2.206.
Analyst Upbeat on Generation Financing Over Long Term
The picture for generation demand may have turned fuzzy in recent months, but over the long haul generators should not experience any major problems in being able to get access to the capital they need to finance their projects, a financial analyst told a FERC-sponsored energy infrastructure conference last Thursday in New York City.