Expectations

Driven largely by year-round tightness in natural gas supply and expectations of normal temperatures for the upcoming heating season, the Energy Information Administration (EIA) in its “Winter Fuels Outlook” said Tuesday it foresees residential customers consuming less gas but paying more this winter.

High prices and expectations that the continental market will stay tight to keep prices up have lit a fire under supply development by Canadian natural gas producers. Gas is identified as the target for a 62% majority of a record 18,470 wells projected to be drilled this year by the Canadian industry.

Dynegy Inc. on Friday previewed its quarterly earnings report, announcing that its core businesses’ results met management’s expectations. However, while power generation, natural gas liquids and regulated energy delivery did well, those results will be offset by higher-than-expected corporate-level expenses, including pending litigation, which will result in a net loss for the quarter.

After reaching a record pace for drilling and a high success rate, Canadian Natural Resources posted record net earnings of C$428 million (C$3.19 per common share) for the first quarter 2003, compared with C$99 million (C$0.81 per common share) for the first quarter of 2002 and C$209 million (C$1.56 per common share) in the previous quarter.

As traders had expected, the above-expectations storage injection report and a continuing dearth of heating load in nearly all areas outside the mountain West resulted in softening prices at all point Friday. Of course, the usual dip in demand over a weekend also played some part.

One day after Anadarko Petroleum Corp. President and CEO John Seitz resigned unexpectedly from his positions, analysts were scratching their heads looking for an explanation. The news came as a shock because it coincided with an energetic and optimistic investor webcast earlier in the month, which was met with positive reactions from some notable analysts.

Natural gas producer XTO Energy Inc., based in Fort Worth, beat analysts’ production expectations last year by showing 23% production growth to an average of 517 MMcf/d compared to 417 MMcf/d in 2001.

Natural gas producer XTO Energy Inc., based in Fort Worth, beat analysts’ production expectations last year by showing 23% production growth to an average of 517 MMcf/d compared to 417 MMcf/d in 2001.

Despite expectations of continued softness following Tuesday’s all-around price plunges, most points found themselves in rally mode Wednesday. With a few scattered small drops thrown into the mix, the majority of the cash market ranged from flat to up nearly 40 cents, with gains in the teens being most common. Tennessee Zone 6 was a standout with an uptick of more than 80 cents.