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Federal Energy Regulatory Commission

Media Headlines Archives October-December 2004

Preliminary Summary of Events Related to EIA Weekly Storage Report of November 24, 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.