Decline

While market liquidity declined, which corresponded to a decline in use of risk management tools, energy markets managed serious challenges and made marginal improvements during the period spanning from January 2002 through June 2003, according to FERC’s second annual “State of the Energy Markets” report.

While market liquidity declined, which corresponded to a decline in use of risk management tools, energy markets managed serious challenges and made marginal improvements during the period spanning from January 2002 through June 2003, according to FERC’s second annual “State of the Energy Markets” report.

Capping a four-day rally in which prices rose nearly 30%, the natural gas futures market tumbled Friday as producers’ selling mixed with profit-taking from speculative accounts. January finished at $6.135, down 20.2 cents for the day, but still up more than $1.20 for the week. At 83,751, estimated volume was relatively light for the session, evidence that funds had backed off their scorching buying pace of earlier in the week.

With flat to mildly higher quotes at a few points in the West amid the overall mix, most of the cash market registered declines ranging from about a nickel to 15 cents Tuesday.

In what may turn out to be the most bullish 2-cent decline in recent memory, natural gas futures clawed their way back from early losses to finish near a high for the session. At $4.642, the October contract ended 1.9 cents lower on the day, but an impressive 9.2 cents above the $4.55 low notched early in the session. At 88,496, estimated volume was heavy and added credence to the rebound.

Adding to Monday’s 20-cent decline, the September natural gas futures contract continued lower Tuesday amid a mixed bag of fundamental and technical market clues. But while bears were quick to claim the 4.5-cent loss and $5.038 settle in September futures as a victory, bulls took solace in the market’s ability to hold above $5.00 and believe that level of support could be a springboard to higher levels Wednesday. At 89,466, estimated volume was heavy for the session.

Denver-based Tom Brown Inc. scored well earnings-wise in the second quarter, but production-wise, the independent’s natural gas numbers were off about 8% compared with a year ago. Oil and gas production overall this year is forecast to be down from 2002 levels, but recent drilling success in the Rocky Mountains and a new acquisition should result in 14% growth from the first quarter through the end of the year, management said Friday.

Attributing the decline in earnings to an accounting change, Oneok Inc. announced 2Q2003 net income of $22.5 million, or 23 cents per diluted share of common stock for the second quarter 2003, compared with $35.4 million, or 29 cents per diluted share, for the same quarter a year ago.

You’ve got to like the “I will not be pushed” mentality exhibited by the market Wednesday. Less than 24 hours after Federal Reserve Chairman Alan Greenspan told Congress that the nation has a long-term gas supply problem, natural gas futures turned lower as traders liquidated longs in hopes of taking advantage of short-term bearish rewards.