Wound

Hurricanes Gustav and Ike likely prevented voluntary natural gas production shut-ins as summer wound down, but oversupply concerns should keep gas prices depressed through 2009, and a soft floor of around $7/Mcf “could easily be breached” if the rig count isn’t severely cut, Raymond James & Associates Inc. energy analysts predicted.

After beginning Tuesday’s session at the day’s high of $8.120, the February natural gas futures contract wound its way to a $7.900 low before expiring at $7.996, down 9.9 cents from Monday’s close. The March contract followed much of the same course on the day before closing out the session at $7.943, down 9.9 cents as well.

J. Clifford Baxter, 43, who resigned as vice chairman of Enron Corp. in May 2001, has died of an apparent self-inflicted gunshot wound. He was found in a locked vehicle in Sugar Land, a Houston suburb, about 2:30 a.m. Friday, and his death initially was ruled a suicide, but Friday afternoon, an autopsy was ordered. Baxter went to work for Enron in 1991 and eventually became chairman and CEO of Enron North America. He was named Enron’s chief strategy officer in June 2000 and was named vice chairman in October 2000. He also served as the lead negotiator in Enron’s purchase of Portland General Electric in 1997.

The U.S. Pacific Northwest’s wildfires continued their swath ofdestruction as the week wound to a close, with blazes so hot thattwo major power lines that deliver electricity to the Northwestmelted. Electricity service was back on Friday afternoon, saidofficials, after an electronic system designed to detect problemslike excessive heat switched service to back-up lines.

The week’s trading wound to a close Friday with generally lesssoftness than had been expected. In relatively quiet activity, mostpoints were down a few cents with only occasional lapses of morethan a dime. A Midcontinent source who said Thursday he wouldn’t besurprised to see mid $1.30s pricing for the weekend, found insteadmost regional numbers averaging in the $1.50s Friday.

Traders who hadn’t finished already wound up their July bidweekbusiness Tuesday and started looking for clues on aftermarketdirection. What they found in swing deals done for today only was amixed bag of flat to up or down slightly from bidweek levels. Butmany sources are expecting an overall strong aftermarket. There maybe some initial softness since the July Fourth holiday weekend isconsidered the lowest demand period of the year. But sources lookfor fundamental cooling load to support gas prices after that.