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Natural gas price drop as supply concern wanes


Saturday, September 13, 2003
Natural-gas prices fell after a government report this week showed an unexpectedly large increase in U.S. inventories of the fuel. U.S. gas in storage rose 97 billion cubic feet last week to 2.486 trillion, the U.S. Energy Department reported Thursday. The gain was 7.8 percent more than analysts had forecast and moved supplies closer to the 3 trillion cubic-foot mark considered necessary for winter heating. "In about five weeks, we're going to get the deficit back to zero and start building a surplus," said Stephen Smith, president of Stephen Smith Energy Associates. "There's nothing going to stop that until prices go down." Prices for futures traded on the New York Mercantile Exchange could fall to between $4.50 and $4 per million Btu by October, and below $4 in November or December, Smith said.

Water, brewery deal OKd

The Pittsburgh Water and Sewer Authority board on Friday approved an agreement with Pittsburgh Brewing Co. to allow the maker of Iron City and IC Light beers to pay off $3.8 million in delinquent water and sewage bills while still keeping water flowing to the operation. The agreement calls for the Lawrenceville brewer pay $500,000 over a one year period on $1.87 million in past-due water charges, and must resolve a dispute with Alcosan over $2 million in sewage charges. All current and future bills must be paid in full. The deal would give the brewer an incentive to pay the remaining past due water balance during the year, by discounting the total to about $1.53 million.

U.S. Steel shares rise

Shares of U.S. Steel Corp., North America's biggest steelmaker, rose as much as 7.5 percent to a 52-week high after Goldman, Sachs & Co. said it expects the company's earnings this year and next to be better than expected. Goldman, Sachs raised its 2003 forecast to a loss of 31 cents a share from a loss of 38 cents and its 2004 forecast to a profit of $2 from $1.87. The estimates of analysts surveyed by Thomson Financial range from a profit of 58 cents to a loss of 87 cents for this year and profit of $1.50 to $2.26 next year. Shares closed up $1.06 to $19.52. Separately, U.S. Steel Balkan d.o.o., a unit of U.S. Steel, closed its acquisition of bankrupt Sartid a.d. in Serbia for $23 million. About one-third of Sartid's annual, 2.4 million capacity is now active.

Nuclear refueling set

Akron, Ohio-based FirstEnergy Nuclear Operating Company's Beaver Valley Power Station Unit 2 in Shippingport will go offline beginning today for a regularly-scheduled refueling, with the outage to last until early October. During the refueling, more than 60 fuel assemblies and 48 control rods in the reactor core will be replaced, among other modifications and improvements. FirstEnergy said the unit has operated for 474 consecutive days since the plant was last refueled in February 2002.

Sale to BASF complete

Pittsburgh-based Mine Safety Appliances has completed the sale of certain assets of its Callery Chemical Division, a leading manufacturer of boron and potassium chemicals used in pharmaceutical products and other applications, to BASF, for $65 million. The purchase, announced July 21, includes Callery's Evans City site along with land, production facilities, certain business relationships and inventory. MSA's Safety Products manufacturing operations will continue at the site under a multi-year lease agreement.

Urges merger vote

In a proxy statement filed Friday by Printcafe Software Inc., Chief Executive Marc Olin urges shareholders to vote in favor of a merger with Foster City, Calif.-based Electronics For Imaging Inc. Olin says that if the merger is not completed with EFI or another third party, the company will not have enough cash to repay $14.2 million in debt that will become due in January without securing additional financing, which he said would unlikely be available. EFI is offering $2.60 per share for Printcafe, which went public in June 2002 at $10 per share, but saw its price slump immediately. The stock closed at $2.57 Friday, unchanged.

Other business news:

  • Union Switch & Signal Inc. received a contract to provide a signal system for the MTA Long island Rail Road's New Jamaica interlocking. terms were not disclosed. Pittsburgh-based Union Switch said more than 400 trains pass through the interlocking daily. The contract includes engineering and support services.

  • Leonard H. Chuderewiez will retire as vice president of diversified businesses from U.S. Steel Corp. at the end of September after 32 years with the company. His responsibilities will be assigned to other company executives.

  • Pittsburgh-area stocks rose on Friday. The Bloomberg Pittsburgh Index of 67 stocks gained 1.01 to 187.58.


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