Falling

The weekend cash market followed the script written for it byfalling between between a nickel and just over a dime at nearly allpoints Friday. It was a “typical” low-demand period phenomena,according to one marketer; another, phrasing it slightlydifferently, called it “just the usual weekend blowout.”

Storage overhang isn’t enough to temper the optimism of EnronOil &amp Gas Chairman Forrest Hoglund when it comes to the outlookfor gas this year and next. With demand expected to grow andproduction expected to fall – 3% according to Hoglund – on softdrilling activity, the coming months are shaping up to be good onesfor producers.

Prices for the concluding weekend of February maintained thesoftening trend that had started earlier in the week, ranging fromflat to a little over a dime lower. And although swing gas tradedFriday for today’s flow only was flat at a few points, most sourcesagreed that the initial March aftermarket was trending downwardoverall from both bidweek indexes and weekend levels.

Pipes in the Gulf Coast and Appalachia achieved small gains ofup to about a nickel Wednesday, but prices were falling back fromearly highs, leading some sources to doubt whether the cash markethas any more upticks in it for a while. Otherwise most pointscontinued the flat pattern of the previous day.

A run-up in citygate prices in the Northeast that had startedlate Wednesday afternoon was falling back rapidly by middayThursday, but not before some buyers had paid more than $3 intoTransco Zone 6-New York City. A trader reporting $3.00-$3.25 salesfor Zone 6-NYC said he had received a late offer of $2.65. TexasEastern M-3 numbers also were coming off hard, another source said.

An Arctic cold front spreading through the nation’s midsectionwas enough to arrest a late December slide in cash prices Tuesday,at least in Eastern markets, which tended to be flat to slightlyhigher. But except for essential flatness at Waha and the PermianBasin, most of the West fell by about a dime or more, topped by adrop of almost 30 cents at Stanfield.

Low oil prices prompted Texaco to cut about 1,000 out of 8,000upstream employee and contractor jobs worldwide as part of areorganization designed to increase emphasis on long-termproduction and reserve growth and streamline costs and improvecompetitiveness. Cost savings are projected to be $200 million peryear, and the reorganization is expected to be completed by the endof the first quarter of next year.

It wasn’t long ago that producers bemoaned sky-high offshore rigday rates and said a turnaround in climbing rates was needed toprevent harm to the industry. Well, that turnaround seems to beunderway.

Perceptions of whether September prices were still fallingFriday sometimes depended on the specific market. A trader in theSouthwest basins said numbers bounced around a bit Friday butessentially had hit bottom late Thursday. But another source saidChicago citygates continued to fall to a low of $1.62.