Daily GPI

Prices for the last day of February were mostly softer Friday,but quotes for the Southwest basins, Rockies and intra-Albertareflected flatness. And Canadian exports into Northwest at Sumas,which had been languishing in the low to mid $1.10s at the start ofthe week, climbed to the $1.30 area. The big exception to Westernfirmness was a fall of about a dime at the Southern Californiaborder in wide-ranging numbers.

The April Nymex contract gained 3.7 cents to settle Friday at$2.321, thanks to what one broker called strong fund buying.However, April may be hard pressed to add much more to that.According to the latest Commitments of Traders report,non-commercials extended their net long position by 7,649 contractsto 9,543 during the last two weeks. The broker estimates that 60%of those positions are in April, which would mean these speculatorswould have to wind out of approximately 5,700 April contractswithin the next four weeks. However, if April breaks out of itsrecent technical trading range within the next several days, it islikely funds will add to their overall long position, meaning moreselling pressure would mount on April and May as we approach theApril expiration, a source argued.

After a pause for consideration by one potential taker,TransCanada PipeLines, Canada’s second-biggest pool of natural gassupplies is again looking for new owners. Pan-Alberta Gas’president, Ross Weaver, confirmed, “we are still for sale.”

The next challenge to the troubled Canadian natural gas pipelineestablishment opens May 25, when the National Energy Board hasscheduled the start for hearings on AEC Suffield Gas Pipeline.

Tennessee Gas Pipeline’s Express 500 Project, which offers firmtransportation through the bottlenecked Gulf of Mexico supply area,won more than 1 Bcf/d of capacity requests from customers duringthe project’s first open season. “We believe that this level ofparticipation demonstrates the need for incremental capacity fromthe Gulf Coast,” said Tennessee President John Somerhalder II.

Prices continued to rise Thursday in trading for both lateFebruary and March. It was mostly a response to the screen’sbelated run-up Wednesday, sources said, but there was enoughblizzard-like weather spreading out from the Upper Plains region togive prices a little extra boost.

The April Nymex contract got off to a fast start Thursday byopening at $2.32 and quickly moving to $2.34. However, strongtechnical selling kicked in at that point, so much so that Aprilslid back to settle the day down 3.4 cents at $2.284.

Halliburton Co. and Dresser Industries announced a $7.7 billionmerger agreement yesterday that will create the world’s largestdrilling and energy engineering company with combined 1997 revenuesof $16 billion and combined market capitalization of over $19billion. The firm, which will retain the Halliburton name will have100,000 employees worldwide. It will be based in Dallas, TX.

The controversy over the terms and conditions of the contractsgiving Natural Gas Clearinghouse a large bite of the westboundtransportation capacity on El Paso Natural Gas – capacity that wasdestined to be turned back to the pipeline at the end of last year- is expected to take center stage at FERC next week. Marketers andproducers say they plan to make a case that the contracts areanticompetitive and contain illegal negotiated terms andconditions, and are responsible for the run-up in transportationrates on El Paso’s system to the California border.