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After starting out just above the psychological $7 level, January natural gas futures stumbled lower throughout the day, thanks in part to sympathy with crude and heating oil, which made significant drops in Friday’s regular session.

After starting out just above the psychological $7 level, January natural gas futures stumbled lower throughout the day, thanks in part to sympathy with crude and heating oil, which made significant drops in Friday’s regular session.

With the 12- and 24-month gas futures strips above $6.50/MMBtu, gas producers even in the Rocky Mountain region are sleeping well at night. But Rockies producers may be in for a rude awakening by this time next year when prices are likely to plummet to nearly $3/MMBtu, according to Denver-based consulting firm Bentek Energy LLC.

Ivan was back for an encore performance in the Gulf of Mexico production area as a tropical storm, but spot prices responded more to weak fundamental demand Thursday as they ranged a few cents to either side of flat in the Gulf Coast and Northeast but were flat to down about 15 cents in the Midcontinent/Midwest and West.

XTO Energy Inc.’s second quarter natural gas production hit a record 803 MMcf/d, a 27% increase from 2Q2003’s 631 MMcf/d, the company reported Tuesday. The Fort Worth-based producer’s oil production was up 38%, also a record, to stand at 17,682 bbl/d, while natural gas liquids output was up 17% over a year ago to 7,463 bbl/d.

A change in inventory accounting principles helped Royal Dutch/Shell Group increase net income in the first quarter by $226 million to $4.7 billion, up from the previously reported $4.43 billion. The oil major last week also updated its quarterly production figures to give investors “further clarity” ahead of its second quarter results, which will be announced July 29.

Although it projected linepack rising well above its maximum target levels Saturday and Sunday, Pacific Gas & Electric lifted for Friday a high-inventory OFO that had been in effect for the preceding two days.

With natural gas prices above the $6/Mcf mark and production activity lagging, Rep. Lee Terry (R-NE) introduced bipartisan legislation in the House last Thursday aimed at removing some of the obstacles to importing more liquefied natural gas (LNG) into the United States. The bill had not even been given a number before a major gas pipeline group and industrial consumers endorsed it.

Northeast citygates were peaking above $10 again Friday as the region entered another period of intense cold. But other than Northeast upticks ranging from a little less than 20 cents to about $1.80, gains were few and far between in the rest of the market. Most points fell from about a nickel to a quarter.