Digesting

After weeks of digesting larger-than-expected additions to gas storage inventories, traders on Thursday were shocked in the other direction as the Energy Information Administration (EIA) reported that a smaller-than-expected 73 Bcf was injected underground for the week ending April 16.

Traders were still digesting last week’s late weakness as May natural gas futures in their first front-month regular session action traded in a tight range Monday before closing at $3.739, up less than a cent from Friday’s finish.

California’s state legislature this year is unlikely to produce any significant energy legislation because the state is still busy digesting major new laws passed since the 2000-2001 wholesale energy market crisis, according to the chairman of the lower house Assembly’s Utilities and Commerce Committee, Lloyd Levine.

After digesting and dismissing a larger-than-expected storage withdrawal report in morning trade and testing $8 resistance-turned-support, February natural gas futures did an about-face to the upside just before noon EST on Thursday. Fueled by talks of further interest rate cuts, the contract notched a new $8.280 high for the move before settling the day at $8.259, up 16 cents from Wednesday’s finish.

After digesting the Energy Information Administration’s (EIA) natural gas storage report revealing that 102 Bcf had been withdrawn for the week ended March 2, natural gas futures traders on Thursday ultimately set their sights on lower prices, bringing the April contract to a low of $7.150 before settling at $7.239, down 12.7 cents on the day.

Despite digesting their third consecutive 200 Bcf-plus natural gas storage withdrawal, March natural gas futures traders on Thursday morning were not in a reactive mood. After trading between $7.550 and $7.750, the prompt month ended up closing at $7.727, up 8.1 cents on the day.

The British are coming back to the merger table. Still digestingits acquisition of Amoco, British Petroleum last week scrolled onenotch down the alphabetic menu of E&ampP companies to rest itshungry eyes on Atlantic Richfield Co. (Arco).

Oklahoma Natural Gas (ONG) is digesting the Oklahoma CorporationCommission’s (OCC) recently released upstream unbundling order andfinding at least a few things it does not like. “Generally, basedon what we’ve seen in the order thus far, there is concern on thepart of management that the order as it exists now could curtailthe ability of our affiliate ONEOK Gas Transportation Co. (OGT) tocompete effectively in the marketplace,” said spokesman Don Sherry.”Our management’s considering where we go from here. Presumably theorder was described as an interim order. Presumably, there may beadditional options available to us at the Oklahoma CorporationCommission. Presumably there are legal options as well, but none ofthat has been decided at this moment.”