Fallen

The enforcement action against fallen hedge fund Amaranth Advisors LLC, some sources say, has apparently spawned either a jurisdictional dispute or just a “concern” between the two federal agencies involved in energy regulation — the Commodity Futures Trading Commission (CFTC) and the Federal Energy Regulatory Commission (FERC).

After years of tight supply/demand balances, high prices and escalating production costs, the North American natural gas market has fallen into a “permanent shortage” mentality not seen for at least 30 years, but the market is actually showing signs of achievement as it transforms itself once again, Pace Global Energy Services said in a report.

After years of tight supply/demand balances, high prices and escalating production costs, the North American natural gas market has fallen into a “permanent shortage” mentality not seen for at least 30 years, but the market is actually showing signs of achievement as it transforms itself once again, Pace Global Energy Services said in a report.

Traders reversed course in a big way Tuesday as August natural gas futures — which had fallen by $1.65 from June 15 through July 9 — sprung higher Tuesday in a fierce round of short-covering. The prompt month hit a high of $6.710 before settling at $6.699, up 28.9 cents from Monday’s close.

Based on a third quarter production survey, which showed a 3.1% year-over-year decrease and a 1.5% sequential production drop, analysts at Raymond James & Associates believe domestic gas production decline rates actually accelerated during the quarter rather than slowed. And this may have happened despite a nearly 30% increase in drilling since late last year.

Based on a third quarter production survey, which showed a 3.1% year-over-year decrease and a 1.5% sequential production drop, analysts at Raymond James & Associates believe domestic gas production decline rates actually accelerated during the quarter rather than slowed. And this may have happened despite a nearly 30% increase in drilling since late last year.

North American natural gas volumes appear to have fallen 1.4% sequentially and 4.6% over levels for the same period a year ago, according to Lehman Brothers analyst Thomas R. Driscoll. Using final production numbers from 43 Lower 48 states and 14 Canadian producers, Driscoll estimated that U.S. production for 2002 will be down 5%-6% over a year ago, while Canada will have a 2.5% drop in production from 2001 levels.

North American natural gas volumes appear to have fallen 1.4% sequentially and 4.6% over levels for the same period a year ago, according to Lehman Brothers analyst Thomas R. Driscoll. Using final production numbers from 43 Lower 48 and 14 Canadian producers, Driscoll estimated that U.S. production for 2002 will be down 5%-6% over a year ago, while Canada will have a 2.5% drop in production from 2001 levels.

If the assessment of a leading industry observer is correct, natural gas prices have fallen to the point where the potential for upside price movement is sufficiently greater than the risk of further declines.