Analyst

Although a final decision has not yet been handed down by the Alberta Energy and Utilities Board (EUB) on its proposed plan to shut in 900 natural gas wells in the Athabasca Oil Sands area in northeastern Alberta on Aug. 1 in order to preserve crude bitumen production, such a decision could have a significant upward impact on Canadian gas prices, according to Thomas Driscoll of Lehman Brothers. Driscoll estimates that gas consumption in Canada would have to decline 6-10% this year as a result of the policy decision.

Mirant Corp. shares plummeted 16% Thursday to $2.28 following a downgrade to “sell” from “neutral” by Merrill Lynch analyst Elizabeth Parrella. She said the chances are increasing that the company will miss its July 14 deadline to gain approval from banks of its plan to refinance $4.9 billion of debt.

Although a final decision has not yet been handed down by the Alberta Energy and Utilities Board (EUB) on its proposed plan to shut in 900 natural gas wells in the Athabasca Oil Sands area in northeastern Alberta on Aug. 1 in order to preserve crude bitumen production, such a decision could have a significant upward impact on Canadian gas prices, according to Thomas Driscoll of Lehman Brothers. Driscoll estimates that gas consumption in Canada would have to decline 6-10% this year as a result of the policy decision.

While some analysts and consultants agree that prices are nearing their bottom for the summer and likely will rebound due to an increase in gas demand related to warmer temperatures and the recent price decline, there is disagreement over what will be the “equilibrium” price for the rest of the storage injection season.

As U.S. storage injections continue to make a run at reaching the 3,000 Bcf ‘full’ mark by the beginning of November, natural gas prices appear to be heading to a new plateau from their normal sub-$4 levels according to Stephen Smith Energy Associates’ (SSEA) new Monthly Energy Outlook.

“Too little gas in storage is a very dangerous thing,” Houston analyst Arthur Gelber, told attendees at the LDC Forum in Atlanta last Tuesday.

“Too little gas in storage is a very dangerous thing,” Houston analyst Arthur Gelber, told attendees at the LDC Forum in Atlanta Tuesday.

To remedy the financial turmoil that exists for U.S. energy merchants still operating, an analyst with Standard & Poor’s Ratings Services (S&P) suggested Thursday that they should consider relying more on “trading around their assets” by hedging and other risk-management activities.

To remedy the financial turmoil that exists for U.S. energy merchants still operating, an analyst with Standard & Poor’s Ratings Services (S&P) suggested Thursday that they should consider relying more on “trading around their assets” by hedging and other risk-management activities.