Climb

Despite a strong boost from increased sales, Petroleos Mexicanos’ (Pemex) net loss for full year 2003 grew by 37% over 2002’s loss. Attributing the fall-off to increased tax and royalty payments made to the federal government, Mexico’s state oil and gas monopoly posted a 2003 loss of $3.7 billion. Income before taxes and duties increased 29% to $30.3 billion. Taxes and duties for the year came in at $34 billion, an increase of 30% from 2002.

Gas futures market observers were startled Wednesday when the October contract bolted 23.8 cents higher to $4.968 ahead of what many experts forecasted would be a large gas storage injection number in Thursday’s weekly EIA storage report.

The Gulf of Mexico (GOM) saw its offshore drilling rig dayrate climb 7.2% from May to June and 5.1% over last year, according to the latest Summary of Current Offshore Rig Economics, or SCORE, for June 2003. SCORE, compiled by oil and gas drilling contractor GlobalSantaFe Corp., reported that worldwide, SCORE was up 3.0% from the previous month.

Gas futures extended Monday’s gains on Tuesday as market participants covered short positions and also responded to the Northeast heat and Tropical Storm Claudette in the central Caribbean. The National Hurricane Center upgraded what had been a tropical wave directly to a tropical storm on Tuesday. The August futures contract ended the day up 12.2 cents to $5.503, not far from its daily high, but opinions were mixed on the market’s direction for the remainder of the week.

A 15.5-cent pop higher in August gas futures Monday left some analysts and brokers considering the possibility that the market has found a summertime bottom due to recent higher temperatures, expectations of smaller storage injections and the likelihood of Atlantic hurricanes. But most observers said they aren’t willing to write off the downtrend just yet. The August contract ended the day at $5.381.

Prices managed to sustain this week’s near-solid upward price movement Thursday, but there were hints that the bullish streak may be coming to an end. New upticks ranged from about a nickel to a quarter, but were mostly moderate at around a dime or less.

Nearly all points continued to climb Wednesday as winter weather began to pay a return visit to northern market areas and parts of the West. However, widespread late price retreats and expectations of the demand slump that typically accompanies a long weekend had sources anticipating softness Thursday.

The last gasp of winter may have been heard last Thursday when the Energy Information Administration (EIA) startled market observers by reporting a 9 Bcf net withdrawal from gas storage for the week ending April 4 after two weeks of solid net injections.

The winter apparently isn’t dead yet. After two weeks of solid net injections into gas storage, market observers were startled Thursday morning when the Energy Information Administration (EIA) reported a 9 Bcf net withdrawal during the past week. It was clearly a step in the wrong direction if the industry plans to make an attempt at rivaling the record injection rate in 2001 just to get storage back to near adequate levels by the beginning of next winter.