Officials at El Paso and Morgan Stanley could not immediately be contacted for comment.
But the market reacted strongly to the report, sending El Paso’s already battered share price to a low of $9.25 in morning trading. The company has been hit hard by problems in the energy trading sector, and two weeks ago said it was exiting the business. It has also been accused of manipulating natural gas prices during the California energy crisis two years ago, and is part way through a large asset sale designed to shore up its balance sheet.
Liquidity has fallen in all power futures markets this year, but industry participants say activity in long-dated contracts has almost completely dried up due to concerns over the longer-term viability of the markets.