Media 
October-December 2004
The event
- On November 24 market observers anticipated a relatively
moderate net withdrawal from storage in the range of 13-25 Bcf
for the week ending November 19, 2004. When the Energy Information
Administration released its Weekly Gas Storage Report at noon
showing a net withdrawal 49 Bcf, the price of natural gas futures
contracts on NYMEX immediately increased.
- Prices on NYMEX rose approximately 60¢/MMBtu between
12:00 and 12:30 p.m., then leveled off until 2:00 p.m., when another
sharp price increase occurred. Prices for December contracts closed
up $1.183/MMBtu and January contracts were up $1.018/MMBtu for
the day. November 24 was the NYMEX month’s close, setting
prices for contracts rolling off November for gas delivered in
December, thus influencing index-priced contracts for December
deliveries.
- EIA issued the next weekly storage report (for the week ending November 26) at 10:30 a.m. on December 2, 2004. EIA included a downward correction of the November 24 report of 32 Bcf, placing the net withdrawal for the week of November 19 at 17 Bcf rather than the previously reported 49 Bcf. In the week of November 29 prices fell from the peaks reached on November 24. Following the release of the December 2 report and correction, prices fell further.
The analysis
- OMOI staff sent a data request to storage operators
in the Eastern Region.
- OMOI staff has conducted follow-up discovery, including
data requests, interviews, depositions, and interrogatories. Staff
is reviewing trading data for the days on and around November
24, 2004.
Preliminary conclusions
- Based on information obtained to date, it appears that
Dominion Transmission, Inc. (DTI), through a clerical error, submitted
the wrong data to the EIA on November 22, 2004. This error made
it appear that DTI had made a substantially larger storage withdrawal
than had actually been the case.
- The clerical error was in the data actually transmitted
to EIA. DTI had correctly compiled and filled out Form EIA-912
for the week ending November 19, 2004, but, when transmitting
the report on November 22, a clerk inadvertently attached a different
data file.
- EIA contacted DTI and discovered the error after issuance
of the report on November 24, 2004, and the clerk resubmitted
the correct data to EIA without informing DTI management. The
resubmission of the correct data formed the basis of the revised
storage report issued by EIA on December 2, 2004.
- DTI management believed the correct figure had been
submitted to EIA, and a DTI manager so stated on November 29,
2004, in response to a press inquiry. DTI management learned of
the mistake on November 30, 2004, while responding to OMOI’s
data request to Eastern Region storage operators. DTI informed
OMOI of its error on December 1, 2004.
- DTI has been cooperating with OMOI’s investigation
of this event. OMOI is continuing to investigate this matter,
including the market reaction to the November 24 EIA report and
the second price move at approximately 2 p.m. that day.
