Forces

Spring is busting out all over — finally — and that translates to lower spot prices. Quotes fell across the board Thursday; a few drops were in single digits, but the rest were fairly consistent in all regions in ranging from a dime to just over 20 cents.

Natural gas futures Wednesday remained locked in a battle between the competing forces of fundamental bearishness and technical bullishness. Buyers were the first to exert their influence Wednesday, propelling the prompt month to a $4.90 high in the first 35 minutes of trading. Bears battled back, however, and rerouted the market to the downside ahead of Thursday’s release of fresh storage data. December futures closed at $4.738, down 12.7 cents for the session.

After being in a state of denial for months over the weakened Mid Atlantic market for new pipeline capacity, Greenbrier Pipeline Co. LLC finally succumbed to reality Thursday, announcing an indefinite delay for its proposed 279-mile pipeline. The project would have provided 585 MMcf/d of firm transportation capacity to LDCs and power plants in the Mid Atlantic region starting in fall 2005 (see Daily GPI, April 3, Oct. 20).

Paramount Energy Trust said last week that has joined forces with several other producers, including Devon Canada, BP Canada, Canadian Natural Resources and ProGas, to take legal action against the Alberta Energy and Utilities Board’s (AEUB) decision to shut in as many as 938 gas wells in northeastern Alberta starting today. The shut-in order is designed to conserve underground pressure and preserve future crude bitumen production.

After grazing the tip of the Yucatan Peninsula Thursday night as it entered the Gulf of Mexico, Tropical Storm Claudette quickly forced natural gas and oil producers on Friday to begin implementing preventative measures on their Gulf platforms, including production shut-ins and employee evacuations. One forecaster warned that Western and Central Gulf Hubs could be in big trouble come Tuesday morning.

In response to continued softness in the wholesale energy market, Raleigh, NC-based Progress Energy said Wednesday that it will reduce the scope of its marketing and trading as well as its power plant operations.

Florida-based FPL Group Inc., the largest power company in oneof the fastest growing states, has agreed to buy New Orleans-basedEntergy Corp. for $13.9 billion in stock and assumed debt to formthe largest utility in the United States. When the deal is done,the new company will serve 6.3 million customers and have acombined generating capacity of more than 48,000 MW.

Just when producers thought it was safe to head back into the waters of the Gulf of Mexico, Hurricane Lili appeared on the horizon ready to take another big bite out of Gulf gas production. Isidore forced 25 Bcf of gas to be shut in last week, according to the Minerals Management Service (MMS). It looks as though Lili could force a repeat of that situation this week, according to the latest reports from producers.

Few tropical storms have packed the punch of Isidore. Despite not reaching hurricane strength, the storm, with its wide girth, heavy rain and high seas and winds, wiped out as much as 4.5 million bbl of oil and 25 Bcf of natural gas production in the Gulf of Mexico last week as hordes of producers fled Gulf platforms and rigs, according to the Minerals Management Service (MMS). October futures prices soared to new 15-month highs at $3.99 last Monday before retreating to $3.686 at expiration on Thursday, and Henry Hub cash prices jumped to highs of more than $4 before slipping to $3.59 on Thursday.