Expecting

Expecting linepack on its California Gas Transmission system to dip below minimum target levels Tuesday through Thursday, Pacific Gas & Electric issued a customer-specific OFO for Wednesday.

Some exploration and production (E&P) insiders are expecting 2008 oil and natural gas prices to average up to 5% higher than Wall Street’s expectations, according to an informal survey by Raymond James and Associates Inc.

Some exploration and production (E&P) insiders are expecting 2008 oil and natural gas prices to average up to 5% higher than Wall Street’s expectations, according to an informal survey by Raymond James and Associates Inc.

The natural gas futures market kept up its unpredictable behavior on Friday by doing the opposite of what most within the industry had been expecting. While traders and analysts largely thought the December contract was working down to test the lower end of the recent range at $7.500, it ended up doing the complete opposite by climbing to finish out the week at $8.001, up 30.1 cents from Thursday and 10.4 cents higher than the previous Friday’s close.

While most traders were expecting an easy session to close out the week following expiration of the May contract on Thursday, Friday instead brought a 20-cent-plus rally in June natural gas and a significant gain in crude futures, along with the Amaranth flashback-producing news that the Bank of Montreal (BMO) had lost C$350 million to C$450 million recently in wrong-way natural gas trades. June natural gas finished at $7.831, up 22.9 cents from Thursday and 31.7 cents higher than the previous week’s close.

Those who were expecting a flood of LNG imports into the United States last year were sorely disappointed, but the Energy Information Administration (EIA) is optimistic there will be a “substantial” LNG rebound this year and sustained growth thereafter. Not everyone shares EIA’s views, however. Some experts say the market will have to wait until late in 2008 before a noticeable influx of LNG occurs.

While many industry experts had been expecting a small injection and some were even calling for a 3 Bcf withdrawal, the 7 Bcf withdrawal reported Thursday morning by the Energy Information Administration (EIA) for the week ended July 21 surprised the market, triggering a jump in natural gas futures prices. However, after notching a $7.250 high in morning trade, August futures stalled — expiring at $7.042, still good for a 15.5-cent gain on the day.

While most industry players had been expecting a fairly quiet expiration for the July natural gas futures contract, bears kept the pressure on in trading Wednesday. After hitting a low of $5.810 late in the session, July natural gas ended up going off of the board at $5.887, down 22 cents on the day.

With its board having recently dismissed its CEO/founder and Wall Street expecting a bankruptcy filing soon, San Jose, CA-based Calpine Corp. received a reprieve of sorts in a Delaware court on Friday, giving the company until Jan. 22 to return $313 million to bondholders from the sale last summer of substantially all of it oil and natural gas assets. Whether the added seven weeks will allow the national power plant developer/operator to avoid a cash implosion was unclear Friday, but the company’s financial situation appeared to be worsening almost daily.