Fall

With Royal Dutch Shell’s earnings in free-fall during the last three months of 2009, the oil major is selling some refineries and shifting some spending to the upstream to prepare for a longer-term focus on natural gas, CEO Peter Voser said Thursday.

Despite The Weather Channel (TWC) predicting icy commutes to work and school for Midwest residents Wednesday, prices continued to fall at nearly all points Tuesday. The overwhelming softness also defied support from a 10.3-cent increase by February futures on the preceding Friday and the return of industrial load from a holiday weekend.

With temperatures beginning to see fall-like conditions again in the South and Midcontinent, and only occasionally lows getting much below freezing outside Canada and U.S. areas near the northern border, prices fell at nearly all points Tuesday. The previous day’s drop of 11.3 cents by January futures also played a role in depressing the cash market.

If New York City were to fall out of compliance with its filtration avoidance agreement as a result of chemicals in the runoff from drilling or other development now being contemplated in the Catskills/Delaware watershed, it could be forced to spend $6-10 billion for a water filtration plant, according to a report from the city’s Independent Budget Office (IBO).

It was no surprise to anyone seeing prices fall by major amounts across the board Friday. Despite modest support from the previous day’s screen rise of 5.7 cents, the lack of weather-based demand and the usual weekend decline of industrial load were a considerable depressant on the cash market.

BP plc’s cost-cutting measures, implemented two years ago, are beginning to pay big dividends, the oil major said last week. Costs are projected to fall by $4 billion this year from 2008, which is $1 billion more than the producer forecast in June.

Prices continued to fall by greater amounts Monday than they had entering the weekend, with forecasts of low temperatures in much of the East falling short of what was expected and the previous Friday’s 15-cent drop by November futures being an extra depressant on cash numbers. The return of industrial load from its usual weekend hiatus apparently had no impact on the physical market.

With the U.S. natural gas rig count down dramatically, domestic gas supplies should fall by 2 Bcf/d or more, or by 4%, by year’s end, setting up a peak-to-trough decline of almost 5 Bcf/d, or 9%, by the middle of 2010, analysts with SunTrust Robinson Humphrey/the Gerdes Group (STRH) said last week. Barclays Capital analysts, however, said it would take colder-than-normal winter weather to bring storage to a neutral level.

With the U.S. natural gas rig count down dramatically, domestic gas supplies should fall by 2 Bcf/d or more, or by 4%, by year’s end, setting up a peak-to-trough decline of almost 5 Bcf/d, or 9%, by the middle of 2010, analysts with SunTrust Robinson Humphrey/the Gerdes Group (STRH) said Monday.