Conditions

The cause of an apparent “well control incident” at a Chesapeake Energy Corp. natural gas drilling site in Wyoming was under investigation Wednesday, and the producer was preparing resources and equipment to get it under control. No injuries were reported.

As part of what is supposed to be a three-state, multi-county action eventually, Garfield County commissioners in Colorado approved a joint resolution Monday that is highly critical of federal Bureau of Land Management (BLM) scaled-back plans for oil shale development.

Physical natural gas prices nationwide surged Tuesday as a combination of factors ranging from weather conditions, to high power prices, to attractive price differentials with the screen all brought buyers to their feet. Gains were especially pronounced in the Northeast as traders noted lingering coolness and a strong basis. At the close of futures trading May had gained 3.5 cents to $2.187 and June had added 2.8 cents to $2.318. May crude oil sank $1.22 to $104.01/bbl.

“The more people think things are going to stay the same, the more surprising it will be when they change,” might be an apt revision of an old proverb for today’s shale gas industry.

Natural gas cash prices continued to erode Thursday as mild weather conditions prevailed in many parts of the country. Declines in the East and Northeast were mostly of the 1-3 cent variety, but on the West Coast losses of close to a dime were noted. Futures traders digested an inventory report showing the first build of the season at 11 Bcf, slightly greater than what traders were expecting and prices fell. At the close of futures trading April was down by 9.1 cents to $2.269 and May settled 8.2 cents lower at $2.372. May crude oil dropped $1.92 to $105.35/bbl.

A new technology to remotely monitor conditions at gas wells in the Marcellus Shale play to ensure compliance with environmental regulations has been developed through a research partnership funded by the Department of Energy (DOE), according to DOE’s Office of Fossil Energy (FE).

After ending a previous Imbalance Warning in Zones 5 and 6 Tuesday, Tennessee implemented a new one Thursday in those zones. Conditions are the same as in the previous Imbalance Warning (see Daily GPI, Jan. 13). Based on currently available information, Tennessee now estimates that it will be able to place the Line 4 section between Main Line Valves (MLV) 208 and 209 back into service in a manner that will allow receiving volumes again from Rockies Express (REX) no earlier than mid-February. Line 4 was shut in and deliveries from REX at their Glouster, PA, interconnect were halted following a November rupture near MLV 205-4 in Morgan County, OH.

February natural gas managed to gain ground Friday as weather forecasts showed impending cooler conditions in eastern and north-central states. At the close February had risen 8.2 cents to $3.062 and March had added 8.1 cents to $3.098. February crude oil eased 25 cents to $101.56/bbl.

January natural gas continued its march towards $3 as recent weather forecasts hint of milder conditions and a subsequent low withdrawal from storage inventories. At the close January had retreated 3.1 cents to $3.096 and February gave up 3.1 cents t $3.143. January crude oil gained 35 cents to $93.88/bbl.