Breaking

After correcting the data for acquisitions and divestitures, U.S. natural gas production increased 1.6% sequentially, breaking a trend of lower production for the previous six consecutive quarters, according to Raymond James energy research. However, the bullish analysts were quick to point out several one-time events that contributed to the deceptively strong year-over-year production numbers.

After teetering above key long-term support for much of the session Friday, natural gas futures tumbled lower in the final minutes of trading last week as a wave of liquidation pressured prices to levels not seen since early January. The prompt month April contract was the hardest hit by the selling, falling down to a low of $5.05 at 2:30 p.m. EDT. April closed at $5.128, down 17.8 cents for the session.

Canadian exports of natural gas to the United States slipped by 3.4% in 2002, breaking a marathon growth streak that set 14 consecutive annual sales records.

Canadian exports of natural gas to the United States slipped by 3.4% in 2002, breaking a marathon growth streak that set 14 consecutive annual sales records.

After breaking to a new 23-month high Tuesday morning in concert with higher cash market prices, natural gas futures sifted lower in the afternoon as traders liquidated long positions when it became apparent that $6.00 was not in the cards. The March contract closed at $5.762, down 0.4 cents for the session and nearly a dozen cents below its $5.88 high. At 84,273, estimated volume was unremarkable considering the market put in a new two-year top.

After bending but not breaking lower at the open, natural gas futures battled back Monday as traders digested updated weather forecasts and storage estimates. The January contract finished at $5.116, down 6.7 cents for the session but up 8.6 cents from its $5.03 low. As expected, estimated volume — at 66,458 — was weak, as many traders elected to remain on the sidelines ahead of the holidays. Nymex energy markets will close at 1 p.m. Tuesday and reopen at 7 p.m. Wednesday with Access trading.

Breaking out of the extremely-tight, 4-cent trading range that corralled prices for much of the session, natural gas futures moved lower Wednesday afternoon on the heels of a disappointing (for bull traders) announcement that only 124 Bcf was pulled from storage last week. The selling pressure was felt immediately after the 2 p.m. EST release and by 2:30 p.m. February had sunk to a new, life-of-contract low at $2.04. A slight up-tick at the closing bell lifted the prompt month to a $2.076 settle, down 3 cents for the session.

Some traders were surprised by the market’s inability to add to Wednesday’s losses Thursday after breaking below key support at $2.50 on another bearish storage report. According to the AGA, 19 Bcf was withdrawn from the Consuming Region West and 3 Bcf was injected in the Producing Region, resulting in a net 16 Bcf withdrawal for the nation for the week ending Nov. 30 (There was no change in the Consuming Region East). The net withdrawal was well within the range of expectations, which were centered on a draw-down of 10-20 Bcf. However the net takeaway was undeniably bearish as it fell short of comparisons with last year (73 Bcf withdrawal) and the five-year average (55 Bcf withdrawal). Storage is now 30%, or 699 Bcf, above year-ago levels.

Record-breaking fourth quarter and year-end earnings havecreated more opportunities for U.S. independents this year, whichnow are flush with cash to ramp up North American exploration andproduction projects. Pioneer Natural Resources Co., Mitchell Energy& Development Corp. and Devon Energy Corp. set new earnings andproduction records in 2000, and are turning their attention andmoney to boost production.