Boosting

With the heat expected to continue boosting power generation demand through the weekend and futures showing no signs of weakness, the week-long cash market rally pressed on Friday although it lost some steam at some locations in the Northeast, particularly Iroquois Zone 2, which had been one of the hottest points over the course of the week. Iroquois prices were flat in the mid $7.60s, but Dracut and Tennessee Zone 6 added more than 30 cents.

Felipe Calderon, Mexico’s apparent president-elect, holds a resume that on paper would appear to give him an edge in boosting Mexico’s energy fortunes. Harvard-educated and well-connected, Calderon served as energy minister under outgoing President Vicente Fox for nine months (see NGI, June 7, 2004; Sept. 15, 2003). But if Calderon succeeds Fox into office this December, his impressive credentials are expected to matter very little in a country apparently more concerned about national pride than its stagnant energy resources.

Felipe Calderon, Mexico’s apparent president-elect, holds a resume that on paper would appear to give him an edge in boosting Mexico’s energy fortunes. Harvard-educated and well-connected, Calderon served as energy minister under outgoing President Vicente Fox for nine months (see Daily GPI, June 2, 2004; Sept. 9, 2003). But if Calderon succeeds Fox into office this December, his impressive credentials are expected to matter very little in a country apparently more concerned about national pride than its stagnant energy resources.

Speculation was growing Friday that China Offshore Oil Co. Ltd. (CNOOC) was only waiting for Congress to recess before boosting its bid for Unocal and announcing a U.S. partner to take over its U.S. assets.

Paramount Energy Trust (PET) purchased 104 Bcf of proved and probable gas reserves and 48 MMcf/d of northeastern Alberta natural gas production for $290 million, boosting its own supply output by 40%. The deal is expected to close in May.

Although winter storm conditions were due to persist through Wednesday in the Northeast and Midwest, they had exhausted much of their price-boosting ability in the key northern market areas Tuesday. Production-area numbers continued to rise by modest amounts in most cases, but quotes were mostly flat to as much as 30 cents lower in the Northeast, Midwest and California.

The spate of colder weather in the Midwest and Northeast that had generated upticks at nearly all points in the previous two days began to lose its price-boosting ability Thursday. Only the Northeast, where high temperatures are predicted to stay at the freezing level or below Friday and into the weekend, continued to see substantially higher prices Thursday. Except for small gains at a couple of scattered non-Northeast points, the rest of the market was flat to just a tad softer.

Midweek cooling trends apparently carried more price boosting punch than some traders had expected. Nearly all points were between flat and up nearly half a dollar Wednesday (however, only one point — El Paso San Juan-Bondad — was at the high end; gains elsewhere were limited to less than a quarter).

A one-time income tax recovery, which inflated financial results in last year’s second quarter, sent Canadian Natural Resources Ltd.’s quarterly earnings this year plunging 51%, but the lower profit did not deter the Calgary-based producer from showing off strong growth in oil and natural gas production.