Downward

Building on the downward momentum created Thursday with a stout natural gas storage injection and flying in the face of surging crude prices, June natural gas futures on Friday threatened to break below $11 as the contract plunged lower. The prompt-month contract recorded a low of $11.080 before inching higher to close at $11.094, down 30.5 cents from Thursday and 44.3 cents lower than the previous week’s finish.

Attempting to capture Tuesday’s downward momentum, natural gas futures traders on Wednesday pushed the June contract to a low of $10.665 before an afternoon bounce finished the regular session at virtually unchanged from Tuesday’s close. The prompt-month contract closed at $10.843, up one-tenth of a penny from the previous day.

Maintaining the downward momentum from last Friday, the December natural gas futures contract — aided by some rare weakness in the petroleum ring — continued to scout lower price levels on Monday, recording a low of $7.980 before closing out at $7.999, down 41.9 cents from Friday.

Signaling the continued downward trend of wholesale natural gas prices, Intermountain Gas Co. puts its second consecutive purchased gas adjustment (PGA) rate decrease in effect Monday, while Spokane, WA-based Avista Utilities last Friday asked the Idaho Public Utilities Commission (PUC) to lower its rates following a similar drop in the PGA.

Despite word that a possible tropical storm could be swirling in the Gulf of Mexico as early as Thursday, natural gas futures traders put downward pressure on the October contract in Wednesday’s trade. The prompt month recorded a low of $6.160 before closing out at $6.180, down 38.8 cents from Tuesday’s close.

Unified price movement returned to the cash market Friday, and the direction was downward in a big way. Spot quotes bowed to relatively moderate late-summer weather trends in most areas (either existing or in the weekend forecast), prior-day futures weakness, the weekend drop of industrial load and new indications that little storage injection capacity remains with nearly two months left to go in the traditional injection season.

Projecting continued stability and downward movement in wholesale prices, Bellevue, WA-based Puget Sound Energy (PSE) proposed a 13% drop in its retail natural gas utility rates Thursday in a filing with the Washington Utilities and Transportation Commission. PSE wants to make the rate cut effective Oct. 1. In a separate filing the utility also asked to lower a low-income surcharge.

British Petroleum and Amoco Corp. have found a way to avoid therecent downward spiral of energy stock prices while boosting theirreserves and production during a tough time in the oil patch. Thetwo companies announced one of the largest ever industrial mergersyesterday, creating North America’s biggest oil and gas producerand the third largest petroleum company in the world behind RoyalDutch Shell and Exxon. The deal is expected to be complete by yearsend.

Building on Friday’s losses, August natural gas futures gapped 28.6 cents lower at the open Monday and continued to work downward, recording a new low for the move at $6.010 before closing at $6.039, down 40.7 cents on the day.