Wednesday

Continuing the attack on the northwest U.S. electric generationmarket, Avista Energy Canada, a Washington Water Power (WWP)affiliate, announced Wednesday the acquisition of Coast PacificManagement Inc., a gas manager for industrials throughout BritishColumbia. Terms of the agreement were not disclosed, but the WWPaffiliate did say that Coast Pacific would be incorporated into itsVancouver operations. The deal became effective at the time of theannouncement.

The futures market was poised to continue lower Wednesday, butafter a lower open failed to entice additional selling,short-covering became the feature of the day. That gave theDecember contract the opportunity it needed to trend into positiveterritory yesterday morning, before settling at $2.213 at theclosing bell. Estimated volume was 75,306.

This week’s general price downturn almost came to a haltWednesday, but mild softness remained the norm for most points.Quotes tended to range from flat to down about a nickel. Marketareas were getting colder but not by much, sources said, and thatwas outweighed by further softness in futures. With little toinfluence it, trading activity remains on the quiet side, theysaid.

For the third day in a row, the futures market caved under heavyselling pressure Wednesday as traders anxiously unloaded longpositions and initiated fresh shorts. Even major support at $2.24offered bulls no reprieve as sellers pushed the December contractdown 7.5 cents to settle at $2.204.

Cash prices continued their upward direction Wednesday, but at aslightly slower pace than the prior two days. A fading winterblast in the Northern Plains, combined with forecasts of moderatingtemperatures and a softening Nymex screen, eased the punch of thestrong cash market in late trading, sources said.

Unocal Corp., like most other producers struggling againstdepressed oil and gas prices, said Wednesday it expects to cutcapital spending by 30 to 40% in 1999 from this year’s level. Inaddition, the company is targeting cash expense reductions of $150million, of which about $100 million has already been identified.

In an effort to encourage retail stock ownership and improveshare liquidity, the KN Energy board of directors announcedWednesday shareholders of record at the close of business Dec. 15will receive a three-for-two stock split and a 7.1% increase inquarterly dividends. The stock will be distributed and the increasewill be paid concurrently on Dec. 31.

After tapping on the brakes a few times Wednesday, theresurgence in November prices had its foot back on the acceleratorThursday. While not quite pedal-to-the-metal as in Tuesday’s gainsthat often hit 30 cents or more, double-digit increases againdominated the cash market.

Michigan citygates and intra-Alberta numbers stuck out like sorethumbs Wednesday in an incremental cash market where all otherpoints were dropping between a nickel and 20 cents. A furtherdecline in the November futures contract combined with continuingmild weather and the perception that Hurricane Mitch is only a veryremote threat to offshore production to cause the cash softness,sources said.