Bottoming

June natural gas prices worked lower amid a frenzy of selling in other petroleum markets. Natural gas traders see a pervasive interest by funds and managed accounts in pursuing the short side of the market, but they caution that any surprises could send prices sharply higher.

There was still quite a bit of heating load left with many Northeast, Midwest, Plains, Rockies and Western Canada locations still bottoming around freezing or lower, including a few cases into the teens, but prior-day futures weakness, the extra depressant on industrial load from a long holiday weekend and further moderation or status quo conditions in the forecast for many areas caused prices to fall at virtually all points Friday.

The U.S. natural gas rig count slowly has begun to rebound after bottoming in June, but the increased exploration has been confined to a few key areas, according to data reviewed by energy analysts. Activity planned by the oilfield service operators in North America will be a key indicator in the coming year, they said.

North American drilling activity is showing signs of improvement after bottoming out in the summer, but natural gas prices indicate “little sign of meaningful near-term recovery” and “caution abounds” for the next six months to a year, two oilfield service CEOs are warning.

North American drilling activity is showing signs of improvement after bottoming out in the summer, but natural gas prices indicate “little sign of meaningful near-term recovery” and “caution abounds” for the next six months to a year, two oilfield service CEOs are warning.

El Paso Corp. shares rebounded 22% on Friday to $4.19 after bottoming out at Thursday’s low of $3.33. On Wednesday, it was in the unenviable position of being the most heavily traded common stock on the New York Stock Exchange because investors were dumping shares in buckets following the announcement that CEO William Wise would step down as chairman at the end of the year and hand over his title of CEO as soon as the board could find a replacement.

Given the current sub-$2 natural gas prices and lower crude oil prices, Raymond James & Associates last week lowered its forecast for North American oil and gas drilling activity in the first quarter of 2002, but the consulting firm anticipates activity to quickly rebound in the second quarter, fueled by stronger gas prices.

Given the current sub-$2 natural gas prices and lower crude oil prices, Raymond James & Associates has lowered its forecast for North American oil and gas drilling activity in the first quarter of 2002, but the consulting firm anticipates activity to quickly rebound in the second quarter, fueled by stronger gas prices.

No one can really predict the weather, “but at the rate winteris setting in, by the middle of February we’ll be where we usuallyare in April” in regard to natural gas in storage, according toThomas A. Petrie, chairman of Petrie Parkman & Co. in Denver.