futures

A U.S. District Court judge for the District of Columbia has ruled that McGraw-Hill Companies must comply with a modified subpoena by the Commodity Futures Trading Commission for confidential submissions by a participant in the natural gas price surveys conducted by its Platts division.

Cash prices disconnected once again Friday from “following the screen,” but this time instead of strengthening after prior-day futures weakness as they had done on Tuesday and Wednesday, most points dropped despite Thursday’s 17-cent Nymex gain.

Despite continued stagnation in terms of shut-in returns from the Gulf of Mexico, October natural gas futures continued to explore lower on Tuesday, testing support lines and settling below $11 for the first time since Hurricane Katrina hit at $10.763, down 26.8 cents from Monday.

Falling futures prices, mild temperatures, declining demand and the slow return of shut-in Gulf production sent cash prices sharply lower on Wednesday. Some points were down more than 70 cents from Tuesday’s levels and most were down 50 cents or more.

The cash market was mixed Tuesday because of slightly weaker futures prices (October down 3.4 cents to $11.657) and continuing uncertainty over the status of Gulf production and the extent of the damage to Gulf infrastructure. Daily cash price changes were anywhere from down nearly $2 in the case of Florida Gas Transmission’s Zone 2 and 3 to up about 30 cents at a couple of Gulf Coast points.

Natural gas prices, which reached a high of $12.25 in futures trading Wednesday, could hit $15/MMBtu by the end of December, predicted analyst Philip Verleger, a visiting fellow at the Institute of International Economics and former director of the Office of Domestic Energy Policy at the U.S. Treasury Dept.

As prompt-month natural gas futures prices continue to threaten their all-time record regular session high of $10.10, the only thing that remains fairly certain when looking at the entire natural gas complex is that prices will continue to be relatively high and volatile.

While the development of Tropical Storm Katrina scared natural gas futures on Wednesday above $10 on concerns over Gulf of Mexico production, one weather forecasting company warned that the industry might be getting a little ahead of itself.

In signing the 1,724-page 2005 Energy Policy Act into law on Monday as oil futures prices were hitting a new all-time high, President Bush conceded it would do little in the short term to bring down energy prices. However, the oil, gas and power industries will see immediate changes in regulation and in incentives to boost supply and reduce demand, which should in the long term lead to lower prices.