Couple

Prices continued to rise at nearly all points Wednesday, but retreats of up to about 15 cents at a couple of Rockies points interrupted to some extent the meteoric rise that the regional market has seen since its latest crash last Thursday. The 37.7-cent spike by November futures on Tuesday had a lot to do with the cash strength, but it was supplemented by concerns about whether a low-pressure area in the eastern Gulf of Mexico (GOM) might affect any production and whether a recently identified La Nina event might result in a colder than normal winter.

New York-based hedge fund Third Point LLC, which in the past couple of years has scooped up substantial shares in several independent producers, has purchased 2.45 million shares (8.1%) of Houston-based ATP Oil & Gas Corp. Third Point did not report a stake in ATP at year-end 2006.

BP plc Chairman Peter Sutherland acknowledged Thursday that the past couple of years have been “one of the most varied and probably turbulent [periods] in the company’s history, but he said the London-based producer will continue to take risks as it moves forward.

As a couple of sources had predicted the day before, the cash market remained close to unchanged Thursday in most cases. Freezing lows forecast for Friday morning in much of the East, even into the Deep South, were augmented by Wednesday’s screen rebound in being responsible for modest gains at a majority of points.

After trying to break below $7.10 for the last couple of weeks, natural gas futures traders were finally successful Friday as the prompt month notched a low of $7.060 before closing at $7.083, down 15.6 cents on the day and 16 cents lower than the previous Friday’s close. Traders on Friday continued to battle entrenched support, but unlike previous attempts that sparked rallies, the bulls were not able to answer the call this time.

The continuing plunge in temperatures may help deplete some of the natural gas storage glut, but if the temperatures rise in the next couple of weeks, three energy consultants last week said working gas levels in storage may finish the season hovering around 1.7 Tcf or more. Barring production shut-ins from hurricanes and assuming normal weather patterns, one analyst said the storage glut may pressure gas prices through the rest of 2007.

The cash market began running out of steam Thursday after a couple of days of somewhat surprising bullish trading. Even with a slight cooling trend starting Friday in the Northeast and support from a January futures gain of nearly a quarter Wednesday, cash numbers were in retreat at most points Thursday.

With the Midwest and Northeast huddling together for warmth as the coldest weather of the season sets in over the next couple of days, January natural gas futures in lethargic trading Thursday moved within a slim 23-cent range before closing at $7.671, down 5.6 cents on the day. Coming in well within expectations, the Energy Information Administration (EIA) reported Thursday morning that 11 Bcf was removed from underground natural gas storage for the week ended Dec. 1.

A severe cold snap over the last couple weeks gave natural gas markets a chilling foretaste of the next year in Canadian supplies by freezing about 10% of production over the past fortnight, industry analysts said early last week.