Yesterday

CMS Energy Corp. went on a shopping spree yesterday, taking amajor stake in one of the Rocky Mountain region’s hottest newproducing areas, the Powder River Basin, and added to its growingMidcontinent midstream asset base with the purchase of Heritage GasServices, L.L.C.

The futures market was poised to trade higher yesterday onmomentum gained from a string of advances dating back to lastThursday, but revised forecasts calling for seasonable temperaturesand a lack of technical direction took the wind out of bull-tradersails, allowing the market to slip lower. For the second day in arow, changes were more pronounced in the December contract than theprompt month. November slid 2.2 cents lower to settle at $2.18, butDecember lost 2.8 cents to $2.455.

The New York State Public Service Commission approved a rateplan yesterday for National Fuel Gas Distribution that will cut itsresidential and commercial rates by $20.4 million in two phasesover the next two years. Not only will customers enjoy lower rates,but the company will have to attain specific service qualitytargets for its customers or face penalties, said PSC ChairmanMaureen O. Helmer.

The $2.08-10 level has been a magnet for November futures pricesthis week, and yesterday was no exception when buyer and sellersmatched up just about evenly to produce a $2.095 settle. Sourcessaid strong selling above $2.10 was enough to thwart the earlymomentum produced from follow-through buying carried over from theWednesday evening Access session. Despite the relatively narrow8-cent trading range, estimated volume registered a hefty 62,079.

The $4 billion stock merger of Kerr-McGee and Oryx Energyannounced yesterday will create the fourth largest independentproducer in the United States with about one billion equivalentbarrels of proved reserves. The move comes in an environment offoundering commodity prices and widespread industry layoffs andfollows the announcement of aggressive cost-cutting moves by Oryx.

The 1 Bcf/d Vector Pipeline project won preliminary approval onnon-environmental grounds from FERC yesterday. The Commission saidno evidence was produced to demonstrate the Midwest project, whichwould link the Chicago, IL, and Dawn, ON, gas transportation hubs,was not required by the public convenience and necessity.

The Securities and Exchange Commission announced yesterday ithas simultaneously sued and reached settlement with a formerdirector of Portland General Corp. and his friend for insidertrading in connection with the July 1996 merger of the Oregonelectricity company and Enron Corp.

The November contract debuted as the prompt month yesterday byposting modest gains during a quiet trading session that saw nofresh news. November opened lower and quickly tested Monday’s $2.27low, but light commercial buying helped drive the market up 4.5cents to settle at 2.347 for the day. Estimated volume was a modest33,428.

FERC yesterday ruled that Koch Gateway Pipeline failed to meetthe burden of proof in its request for market-based rate fortransportation services, causing it to reverse a 1997 initialdecision by an administrative law judge.