With gas futures prices soaring past $5, now is not a bad timeto raise price forecasts and expectations for the coming winter andnext year. Prudential Securities did just that yesterday, uppingits predictions on spot wellhead prices to $4.10 for the secondhalf of the year, $3.55 for all of 2000 and $3.65 for 2001.
Forecasts
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Transportation Notes
Citing forecasts of cooler temperatures in the Pacific Northwestfor the holiday weekend, Northwest began allowing both on-systemand off-system balancing Thursday after a long period of barringon-system balancing. However, storage volumes remain high in theJackson Prairie and Clay Basin facilities, limiting operationalflexibility, Northwest said.
Mid-Morning Spike Does Little to Curb Bearish Pressure
As if crashing oil prices, fresh weather forecasts and the release of storage data were not enough Wednesday, the natural gas futures market was rocked again Thursday by a report of a pipeline rupture in the Gulf of Mexico (see related story this issue). Although the accident has since been dubbed a non-event, it produced a dramatic, if brief, spike in prices as commercial traders loaded up on contracts only to dump them just minutes later.
Hurricane Guru Raises Forecasts for 2000 Season
Judging from the huge dip in futures prices last Wednesday, themarket apparently didn’t get wind of a new, more bullish hurricaneseason forecast by renowned hurricane prognosticator Dr. WilliamGray and his team of soothsayers at Colorado State University.
Hurricane Guru Raises Forecasts for 2000
Judging from the huge dip in futures prices yesterday, themarket apparently didn’t get wind of a new, more bullish hurricaneseason forecast by renowned hurricane prognosticator Dr. WilliamGray and his team of soothsayers at Colorado State University.
Low Storage, Rising Demand Push Forecasts Ever Higher
Better get used to high gas prices, say Lehman Brothers andSalomon Smith Barney, because $3.50/MMBtu is likely to be the normfor a while. In a research note, Robert Morris, Salomon SmithBarney’s energy analyst, said he expects prices to average $3.50during the third quarter and $3.75 during the fourth quarter ofthis year. Meanwhile, Richard Gross, senior vice president ofLehman Brothers Energy Research, said he expects Henry Hub priceswill average $3.30 this year and $3.35 in 2001.
Transportation Notes
TransCanada advised shippers Friday that due to forecasts ofwarmer than normal weather in the Eastern Delivery Area, diversionsand IT to the South West Delivery Area might be curtailed over theweekend and possibly into this week, depending on marketconditions. Diversions from Niagara and Chippewa would be excluded,the pipeline said.
Mitchell Beats 4Q Analyst Predictions
Still up for sale, Mitchell Energy & Development Corp. beatanalyst earnings forecasts by 25% in the fourth quarter with netearnings of $35.3 million. This compares to a net loss of $47.3million in the prior-year period. The prior period’s loss wascaused by low commodity prices and included after-tax charges of$46.9 million for asset impairments and personnel reduction. Thecurrent quarter’s results included a $0.7 million after-taxreversal of previous litigation provisions.
Futures Higher as Storage Bulls Prevail Over Weather Bears
Despite warming temperatures across much of the nation andforecasts calling for more of the same, natural gas futuresrebounded yesterday, as traders covered shorts amid heavilyoversold conditions and ahead of potentially “very bullish” storagedata to be released today.
Weather Forecasts Incite Late Sell-Off
To say the weather had an impact on the natural gas futuresmarket last week might be the biggest understatement of the newmillennium. After all, not a day went by that neither forecasters’predictions, nor ever-changing weather itself did not play intotraders’ decisions. Add to that the fact different independent andgovernmental forecasting agencies were not always in agreement. Itall came to a head last Friday when prices soared early in the dayin anticipation of the return of cold temperatures in the Northeastfor the weekend, only to come crashing down that afternoon upon therelease of a fresh medium-range forecast for this week. The Marchcontract was the hardest hit by the sell-off, tumbling 2.2 cents tofinish at $2.57 Friday. Less dependent on the near-term forecast,the outer months managed to hold onto small advances into theclose.