Fill

The Natural Gas Supply Association (NGSA) wasted little time inpicking successors to fill positions that were left vacant by thesudden departures of two staff members.

After a quick check lower to fill in a small chart gap, thefutures market continued higher last Friday in an abbreviated, butextremely active trading session. The July contract finished up 7.6cents to $2.358, capping a two-day, 14.8-cent advance. Estimatedvolume was 66,263.

For the second trading session in a row yesterday the Maycontract dipped lower at the open, but was unable to completelyfill in the chart created between last Wednesday’s $2.18 high andThursday’s $2.20 low. And once that early selling pressure driedup, the market was free to rally on waves of buying by both localand commercial traders. The May contract pressed higher throughoutthe session, spiking above the $2.30 level at the closing bellbefore settling at $2.299, a 7.3-cents advance on the day. Atechnical difficulty at Nymex last night suspended the after-hourscomputer-only Access trading session.

Energy Secretary Bill Richardson last week announced the Clintonadministration will allow producers with offshore federal leases topay part of their royalties with oil for a limited time rather thanwith cash. This action would help to draw down the oil oversupplythat has been depressing prices and provide some relief, if onlytemporarily, to small oil and gas producers. Richardson indicatedthe department will disclose further initiatives this week to boostlagging oil and gas production in the United States.

Canadians are wasting no time making sure production capacitykeeps up with increases in demand for natural gas that pipelineprojects are expected to generate over the next two years,according to an annual deliverability survey released last week bythe Canadian Energy Research Institute. Not even this year’s 30%drop in oil prices hurt producer revenues and budgets enough toslow down gas development.

Traders love to fill in chart gaps and Monday’s strong open leftnot a wide chasm, but a small and clearly defined gap between $2.04and $2.05. To that end, sellers wasted no time Tuesday in pushingthe July contract lower. And once the gap was filled in thecontract continued to fall, settling at $1.989, down 11.1 cents.

There will be no shortage of natural gas to fill the new wave ofCanadian export pipeline projects or a future generation offacilities yet to be born, according to veterans of the supplysector north of the international border.