York

The Commodity Futures Trading Commission (CFTC) approved a NewYork Mercantile Exchange (NYMEX) application to trade electricityfutures and options based on delivery at the Pennsylvania-NewJersey-Maryland (PJM) western hub.

Natural gas futures at the New York Mercantile Exchange haveconsistently featured choppy trading, high daily volatility, andprice erosion for the last several months. And expiration dayTuesday was no different as traders tested both sides of a largetrading range before depositing the January contract 2.3 centslower to its final resting place at $1.765. And in doing so, theJanuary contract tumbled over a half dollar during its reign as theprompt month.

The bears were at it again at the New York Mercantile ExchangeWednesday when follow-through selling on the heels of Tuesday’sprecipitous price falloff took prices lower. The prompt Januarycontract gapped lower at the open and never looked back, posting a6.6-cent loss to $1.847 for the session.

Changes were in the air last Wednesday at the New YorkMercantile Exchange. Traders were greeted with a new promptmonth-January, a stronger December cash market, and even a freshrally-thanks to a short-covering Tuesday. Just about the only thingthat hadn’t changed were the bearish fundamental factors-storageand weather-prevalent in the market. But once again thosefundamentals were king Wednesday, and the selling pushed theJanuary contract down 7.9 cents to $2.196 at the closing bell.

New York Public Service Commission issued a notice last weekseeking comments on how “strandable” gas capacity costs createdwhen existing sales customers migrate to transportation serviceshould be recovered from customers. Interested parties should filetheir comments by Dec. 14.

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.

Bulls have not had much to smile about in the last five monthsat the New York Mercantile Exchange, so it was to their surpriseand delight when a trio of factors — storage, technicals, andanother possible tropical storm — combined to lift the marketThursday. The three remaining months in 1998 all received an almostequal boost with October edging out the others slightly byadvancing 6 cents to settle at $1.712 in moderate trading activity.

Friday was a day of tests at the New York Mercantile Exchange.The market pushed lower on the open to test support at $1.81 onlyto rebound in the hopes of knocking out resistance at $1.875.However, both attempts failed and the September contract was leftto close at $1.833, almost unchanged for the day.

The New York Mercantile Exchange (Nymex) reported a fairlyactive first day of trading for the eastern electricity futurescontracts on Friday, with a total volume of 939 contracts traded.This, however, was 282 fewer contracts than the number tradedduring the first day of the western electricity contracts in 1996,a Nymex official said.