Diet

Just as the natural gas industry unveils a smorgasbord of significant supply growth potential, the power sector is cutting gas from its diet, according to an analysis by Barclays Capital.

At the same time that supply projections go up in Canada’s chief natural gas-producing province, the demand side of the Alberta market is going on a diet. Weaning plants partly or entirely off gas is a feature of all the latest entries into the lineup of oilsands projects, the biggest and fastest-growing element of industrial fuel demand in Alberta, and also all Canada.

At the same time that supply projections go up in Canada’s chief natural gas-producing province, the demand side of the Alberta market is going on a diet. Weaning plants partly or entirely off gas is a feature of all the latest entries into the lineup of oilsands projects, the biggest and fastest-growing element of industrial fuel demand in Alberta, and also all Canada.

BP Amoco CEO Sir John Browne put the company on a crash dietlast week, with a worldwide three-year plan to cut $4 billion incosts and surgically remove $10 billion in non-core asset fat,including the sale of its 64% share in U.S. gas and oil producerAltura Energy. BP Amoco also intends to boost capital expenditures$26 billion.

Without any impetus to break in either direction, natural gasfutures continued to subsist on a steady diet of range-boundtrading yesterday at the New York Mercantile Exchange. But incontrast to Tuesday’s session, which featured the market closingnear its high trade for the day, Wednesday’s session was dominatedby selling that ushered the prompt August contract down 3 cents to$2.146. Estimated volume was light, with only 44,985 contractschanging hands.

The futures market continued its rally on Friday, fed on asteady diet of short-covering and local buying ahead of the holidayweekend. Early gains posted by the October contract led to a quickspike to the $1.86 level before light position squaring trimmedadvances before the closing bell. That left the prompt contract upa respectable 7.1 cents to settle at $1.783. October was not alone,November and December each more than matched October’s gains,increasing 7.6 cents and 7.3 cents, respectively.