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With natural gas physical prices and crude oil futures leading the way, natural gas futures gapped lower at the open bell and funneled to new three-week lows Tuesday amid speculative fund selling pressure. Two listless buying attempts by locals was the only positive for bulls, but both surges fell short of filling the chart gap up to $3.48 as sellers rushed back in to punish the market for the attempts. The June contract took the selling squarely on the chin, ending 9.5 cents lower at $3.395.

The Federal Energy Regulatory Commission staff has further expanded the scope of its three-month investigation into the activities of energy sellers in western markets to include round-trip, or so-called “wash” trading transactions.

More than seven months after the project was first announced, El Paso Corp. said Tuesday that it is holding new open seasons for the Seafarer Pipeline System, which will transport natural gas from the Bahamas to southern Florida to feed new gas-fired power plants in the state. Preliminary open seasons were conducted in October 2001 when the $226 million project was still known as the Bahama Cay Pipeline (see Daily GPI, Oct. 3, 2001).

Rather than extending FERC’s standards of conduct to cover mostly all energy affiliates of power/natural gas transmission providers, a Dominion Resources official proposed Tuesday that the Commission focus on identifying the specific functions of energy transmission providers and their affiliates that could lead to sharing of competitive market information, and place restrictions in those areas.

This year could be the first year since the gas marketing business began more than a decade and a half ago that annual marketing volumes will decline, said Benjamin Schlesinger, president of Maryland-based consulting firm Schlesinger and Associates, which has been closely tracking the industry since the early 1980s. Schleslinger said in addition to the likely volume declines this year, the number of gas merchants in the business also will fall sharply.

With the flight to more secure trading channels in the industry and demand for online trading, a new online futures exchange is preparing for launch this Friday. The Merchants’ Exchange will launch a fully electronic cash-settled energy futures exchange, with Henry Hub natural gas futures (identical to the Nymex contract) and West Texas Intermediate crude. Brent crude, NY Harbor unleaded gasoline, NY Harbor heating oil, European gas oil and energy options all will soon follow.

Former executives and traders said that Reliant Resources Inc. apparently brokered a complex fiber-optic network swap in March 2001 to help Enron Corp. and Global Crossing Ltd. sidestep some accounting rules, according to an article in the New York Times. The plan by Enron and Global Crossing, which are both in Chapter 11, was to disguise a $17 million loan to Global Crossing by Enron, and to book revenue for the companies. Enron and Reliant both declined comment on the details, although Reliant acknowledged that it completed a deal with Global Crossing.

Natural Gas Pipe Line Co. of America (NGPL) is the most cost-efficient gas pipeline to operate and maintain of the top 23 domestic pipes, according to a benchmarking study by Houston-based Lukens Energy Group. The study analyzed interstate pipeline companies and ranked them in terms of an operating and maintenance (O&M) cost-efficiency index on a scale of 0-10. NGPL, owned by Kinder Morgan Inc. (KMI), scored a 10.

Although there have been few if any formal announcements about increases in exploration and capital spending, there has been a 12% increase in the rig count since it bottomed out a little more than a month ago and producers probably won’t wait much longer to take advantage of a 12-month gas futures strip that is hovering over $4/MMBtu, Raymond James & Associates said in an equity research note.