Downturn

Aiming at easing the personal pain involved in the oil and gasindustry downturn, the Texas Independent Producers &amp RoyaltyOwners Association (TIPRO) has instituted an Oil and Gas Job Bankat its website www.energyconnect.com.

Most points fell between a nickel and a dime Monday, draggeddown by the anchor of a weaker Henry Hub futures contract, sourcessaid. A chilly West was most resistant to the general softeningwith prices that tended to be flat to off only a couple of cents.

The cash market was back on a downhill slide Wednesday as theuprising that had carried some points as much as 80-90 cents higherin the first two days of the week ran out of gas. The retrenchmentwas not unexpected because futures were falling for the second dayin a row and the colder weather that had driven the earlier uptickswas giving way to new forecasts calling for no colder than “normal”temperatures in many areas.

This week’s general price downturn almost came to a haltWednesday, but mild softness remained the norm for most points.Quotes tended to range from flat to down about a nickel. Marketareas were getting colder but not by much, sources said, and thatwas outweighed by further softness in futures. With little toinfluence it, trading activity remains on the quiet side, theysaid.

Michigan citygates and intra-Alberta numbers stuck out like sorethumbs Wednesday in an incremental cash market where all otherpoints were dropping between a nickel and 20 cents. A furtherdecline in the November futures contract combined with continuingmild weather and the perception that Hurricane Mitch is only a veryremote threat to offshore production to cause the cash softness,sources said.

Duke Energy credited a diverse portfolio for insulating it fromthe energy industry’s downturn. The company reported 1998 thirdquarter basic earnings of $1.18/share, up 42% from 83 cents/sharefor the same quarter in 1997. Duke posted earnings of $423.8million for the third quarter, compared to $298.4 million for thesame quarter in 1997. Overall earnings before interest and taxes(EBIT) for the third quarter of 1998 was $870.9 million versus$632.2 million for the third quarter of 1997.

Bulls have had very little if anything positive to talk aboutlately with respect to gas prices at the New York MercantileExchange. Mild June temps, a healthy storage level, and amplesupply have weighed on the market since the current downtrend beganon April 9th. So it comes as no surprise that upon the release ofthe less-than-expected 86 Bcf AGA storage injection, bulls sawtheir first opportunity in a while to push the market higher. Thefirst thrust was registered in Wednesday night’s ACCESS session.Then, after opening higher yesterday, the contract traded in a neat5-cent trading range settling at $1.970, up 4 cents for the day.

The May Nymex contract continued to slowly rebound from itsmassive price downturn on Monday by closing Wednesday up another2.0 cents at $2.521. Trading was held to an extremely tight range,as the spot month could only post a high of $2.555. Total volumewas estimated at 255,671 contracts.

Cash numbers were softening as expected Thursday, following theprompt of the futures screen’s late downturn Wednesday. But itlooks like it’s already time to reverse field again and head upwardtoday based on the screen’s strong gain Thursday, sources said.