Weekend

The market emerged from a three-day weekend with negative influences still dominant throughout the East and no hint of a rally in sight. Declines tended to range from a nickel to about a dime at eastern points, with those on either side of a dime most prevalent. Larger drops of up to about 20 cents were recorded at unseasonably mild Northeast citygates and downright balmy Florida citygates.

Adding to Thursday’s long liquidation, natural gas futures continued lower Friday morning as traders factored in the price-negative combination of mild weather forecasts and weaker physical market prices. In abbreviated, pre-holiday trading, the February contract finished the week at $2.236, down 1.8 cents for the day but up 3.2 cents for the week.

Despite forecasts calling for moderating temperatures both over the weekend and this week, natural gas futures shuffled higher Friday as speculators and options traders covered short positions. The November contract received the biggest boost at Nymex, rising 10.3 cents to $3.041. In doing so, November notched its first $3.00-plus close since Aug. 23.

The big rallies that had developed late in Friday’s trading for the weekend provided a solid base for spectacular price increases Monday. Gains of about 30 cents or more were common in the East, while the West, where winter storm watches were posted for parts of the Pacific Northwest and northern Rockies, registered upticks that exceeded 40 cents in most cases.

Expecting linepack to exceed its maximum target levels over the weekend, Pacific Gas & Electric issued a systemwide high-inventory OFO for Saturday. The order had $5/Dth penalties for positive daily imbalances exceeding a 6% tolerance.

The Oregon House was expected to consider legislation over the weekend that would delay state implementation of electric restructuring into early 2002 from a current schedule of Oct. 1, 2001. The Oregon Senate endorsed the measure last month.

With little in the way of fresh fundamental news, natural gas futures moved sideways Friday, as traders held the market to an extremely tight, six-cent trading range. A modest downtick at the closing bell was enough to pressure prices below unchanged on the day. The July contract finished at $3.742, down a half-cent for the session and 23.7 cents lower for the week. Since becoming the prompt month nearly four weeks ago, July is down 6.8 cents after trading as low as $3.67 (May 30) and as high as $4.44 (June 12).

With a holiday weekend spent mulling sub-$4.00 natural gas under their belts, traders at the New York Mercantile Exchange wasted little time taking the June contract for one last ride lower Tuesday, as they demoted the prompt month through several levels of support. By virtue of its $3.738 final closing price, the June contract limped off the board with a 23.5-cent loss for the day, resting a whopping $1.203 lower than where it was when it began its tenure as prompt contract at Nymex a month ago.

Northwest plans to allocate interruptible injections into the Jackson Prairie storage facility as needed over the holiday weekend, saying expected warm weather in the Pacific Northwest could cause injection nominations to exceed Jackson Prairie capacity. Northwest anticipates that the facility’s total capacity may be needed to meet SGS-2F requests and the pipeline’s own balancing requirements.