Weak

Mild weather seen in the Southeast and a softer U.S. economy were not enough to trip up Southern Co.’s 2001 earnings results as several factors, including continued customer growth and cost controls, helped the utility giant post earnings for the year of $1.12 billion, or $1.62 per share, compared with reported earnings of $994 million, or $1.52 per share, in 2000.

Ending a four-day, 21-cent rally, natural gas futures reversed lower Thursday as weak long traders headed for the exits amid bearish weather news. After opening at Wednesday’s high at $2.40, the prompt month took on the trajectory of a safe pushed out of a 10 story building, falling 14 cents in the first 45 minutes of trading yesterday. From that point forward, February checked to either side of $2.26 on a heavy volume of 123,632 contracts. February closed at $2.254, down 14 cents from Wednesday’s settle.

Western markets rejoined their counterparts in the East as all points registered double-digit gains Monday that were mostly between about 15 and 30 cents. The source of the price strength remained a mystery to several sources who contended that fundamental weather demand was not that heavy outside the Upper Plains, Pacific Northwest and Rockies.

Despite a quarter of weak natural gas prices, Calgary-based Canadian 88 Energy Corp. said last Tuesday that its third quarter cash flow came in at C$7.5 million, more than three times the C$2.3 million reported in the third quarter of 2000, advising that it continues on track to achieve a year-over-year increase in production and reserves.

Buoyed by heavy market-on-close buying, natural gas futures spiked higher at the closing bell, but that only served to trim losses suffered earlier in the trading session. The December contract finished at $2.606, down 9 cents for the session. Meanwhile, the January contract closed with a 1.6-cent gain at $2.951, proving that traders have not yet given up on the winter. Estimated volume of 120,569 was heavy, even considering it was December’s penultimate trading day.

Despite a quarter of weak natural gas prices, Calgary-based Canadian 88 Energy Corp. said Tuesday that its third quarter cash flow came in at C$7.5 million, more than three times the C$2.3 million reported in the third quarter of 2000, advising that it continues on track to achieve a year-over-year increase in production and reserves.

The weak economy should counterbalance the impact of declining U.S. productive capacity because of the step-down in drilling, according to Arlington, VA-based consulting firm Energy and Environmental Analysis Inc. (EEA). As a result, EEA predicts Henry Hub spot prices will average about $2.75/MMBtu over the next two years, ranging between $2 and $4 this winter with the majority of prices in the $2.75-$3 range and holding between $2 and $3.25 next summer.

Generally weak fundamentals notwithstanding, for the most part the cash market Thursday continued to resist the bearishness that many believe is its proper destiny. For a second straight day, quotes at eastern points were a mix of flat to slightly up or down, with small declines prevalent again. However, most of the West registered larger downturns due to California LDC OFOs, although many of the drops outside the Rockies were less than a dime.

The weak economy should counterbalance the impact of declining U.S. productive capacity because of the step-down in drilling, according to Arlington, VA-based consulting firm Energy and Environmental Analysis Inc. (EEA). As a result, EEA predicts Henry Hub spot prices will average about $2.75/MMBtu over the next two years, ranging between $2 and $4 this winter with the majority of prices in the $2.75-$3 range and holding between $2 and $3.25 next summer.