NGI Archives

The tiny futures increase Monday seemed insignificant but mighthave been a harbinger of a much stronger rise Tuesday that carriedcash up with it. As has often been the case in the past, sourcesdragged out the old refrain of “following the screen” to explain…why cash was rising. Most points west of Waha were flat to only acouple of cents higher, and Rockies prices even fell a bit, butother markets tended to see upticks of 4-9 cents. Activity wasdecidedly more intense following what many people had considered a”boring market” Monday.

Technically, you could call Tuesday’s price action at the NewYork Mercantile Exchange a rally. Not only because the spot Maycontract rose 9.2 cents to $2.561, but also because the marketmoved on strong technical buying. “Funds got back in the market ina big way,” a trader succinctly surmised, referring to an estimatedvolume figure which came in at more than 100,000 contractsyesterday.

Consolidated Natural Gas (CNG) blamed thin margins for its exitfrom wholesale marketing and trading to focus on retail. The shiftin strategy comes on the heels of the March announcement CNG willtake a $20 to $25 million loss in Energy Services to close outelectricity positions. The move could herald the beginning of amarketer shakeout, noted one analyst.

Natural Gas Clearinghouse’s (NGC) decision earlier this month topost 40% of its San Juan-to-California capacity on El Paso NaturalGas for release appeared “at first blush” to be a “magnanimousgesture” on the marketer’s part, but it was far from that, said anenergy consultant.

A major independent producer group has painted a rosy outlookfor short- and long-term growth of domestic gas demand and supply.U.S. gas demand is expected to rise by one percent to 22.23 Tcf in1998, eclipsing the previous consumption peak achieved in 1972, andlikely will hit 23 Tcf in 2000, according to forecasts issued atthe Independent Petroleum Association of America’s (IPAA) Oil andGas Investment Symposium in New York Tuesday.

The Williams Companies reported first-quarter 1998 results werereduced primarily by costs related to its MAPCO acquisition,unfavorable conditions in some energy market sectors and continuedinvestment in the company’s communications business.

Connecticut Energy Corp. said subsidiary CNE Energy ServicesGroup signed a letter of intent with Conectiv to join a liquefiednatural gas (LNG) storage joint venture. This new business, to benamed Total Peaking Services (TPS), will use an existing 1.2 BcfLNG storage facility in Milford, CT. The venture has received FERCauthorization to provide open access storage; but is awaitingtariff approval, expected later this spring.

Viking Gas Transmission, a partner in the Viking Voyageurpipeline expansion project, formally confirmed it has been unableto secure sufficient shipper support for the proposed expansion andis “reviewing its alternatives” on the project with its partners,TransCanada PipeLines and Nicor.

Lack of activity was the popular excuse for the mostly stagnantprice levels during Monday’s cash market trading session. Mostsources agreed that moderating temperatures along with aslow-moving Nymex screen were to blame. With the exception of theRockies and intra-Alberta gas, which registered the only notabledeclines of the day, cash prices generally started the new weekflat to up or down a penny or two across the board.