Expectation

Bank of America Merrill Lynch analysts cut their 2010 U.S. gas price forecast to an average of $5/MMBtu from $6 on the expectation of rising production from shale plays, which might only be thwarted by even lower prices still, they said.

With little expectation for a near-term economic recovery, Royal Dutch Shell plc plans to cut its capital spending program by 10% in 2010, the CEO said Thursday. “Substantial” job reductions also are likely, which would be on top of the recent 20% cut in senior management jobs.

With little expectation for a near-term economic recovery, Royal Dutch Shell plc plans to cut its capital spending program by 10% in 2010, the CEO said Thursday. “Substantial” job reductions also are likely, which would be on top of the recent 20% cut in senior management jobs.

After having pushed June natural gas futures lower Thursday morning on the expectation of a storage build report of approximately 100 Bcf, traders were forced to backpedal higher after the Energy Information Administration (EIA) reported that 95 Bcf was injected into underground inventories for the second consecutive week. Alas, when all was said and done the prompt-month contract ended up closing at $4.292, down 4.1 cents from Wednesday’s finish.

In expectation of “a return to moderate temperatures in its market area,” Transco said it will end Tuesday the Imbalance OFO that was implemented Sunday. A restriction on nominating due-shipper imbalance makeups also will be lifted, Transco said, but other scheduling restrictions currently in place will continue.

In expectation of a return to moderate temperatures in its market area early this week, Transco said it planned to end Sunday the Imbalance OFO that was implemented Thursday. A restriction on nominating due-shipper imbalance makeups also would be lifted, Transco said, but other scheduling restrictions currently in place will continue.

December natural gas futures went off the board on Monday with a bang as the expectation of cold and last-day short-covering drove the contract 40.8 cents higher to expire at $6.888. January natural gas closed up 32.4 cents at $6.827.

With the expectation of falling gas prices and closer alignment of the Nymex strip with the spot market, Raymond James & Associates Inc. — which last week cut its 2008 gas price forecast to $7/Mcf from $10/Mcf (see Daily GPI, Sept. 18) — recommends that investors pursue an oil-focused strategy.

With the expectation that the injection season will end with gas storage at 200 Bcf above the five-year average, Lehman Brothers cut its price forecast for the rest of the year to $7/MMBtu from $7.75/MMBtu “to reflect the turmoil that the oversupply may cause in the market in the next several months.”