Holiday

Following the extended holiday weekend, February natural gas futures pushed lower once again on Wednesday as near-term weather for much of the country still seems more suitable for water skiing rather than snow skiing. Trading between $6.140 and $6.290 on the day, the prompt month ultimately ended up settling at $6.163, down 13.6 cents from Friday’s close.

It’s not happy post-holiday news for natural gas bulls when a pair of analysts write in their first market note of the year that their 2007 outlook “has deteriorated substantially from what we were expecting just a few months ago.”

Pacific Gas and Electric Co. sent its customers some early holiday cheer Thursday, announcing that natural gas bills in December will take a 15% plunge compared to the same month last year, and the wholesale cost of gas is down sharply on the same December 2005-to-December 2006 comparison. Wholesale charges in December also are down 2%-3% compared with November levels.

Natural gas bulls were licking their lips following the long holiday weekend as weather forecasters Monday were calling for a significant dose of cold Canadian air to sweep across the country from west to east this week. Opening higher following the overnight trading Sunday, December natural gas futures on Monday put in a high of $8.025 before settling at $7.998, up 28 cents on the day.

Natural gas futures trading on the New York Mercantile Exchange was scant Monday as a number of market participants took the day off to observe the Jewish Holiday Yom Kippur. While trading within a slim 13-cent range, November natural gas put in a high of $5.730 before settling at $5.643, up 2.3 cents on the day.

Prices were mixed in Wednesday’s resumption of trading after a four-day holiday weekend, but generally tended to be stronger in the Midcontinent and West and weaker in the Gulf Coast and Northeast. Rains were dampening power generation load from New Mexico and Texas through the Southeast and Mid-Atlantic, and below normal temperatures in several other areas left the desert Southwest as the only remaining repository of high heat levels.

Just before the July 4 holiday, California’s legislature was in full operational mode, grinding out several key energy measures by Friday, including global warming emissions limits and jump-starting accelerated solar and energy efficiency initiatives. Most of the action remains in the state Senate.

A high-linepack OFO declared for last Wednesday by Southern California Gas was kept in effect in effect over the holiday weekend and through at least Wednesday of this week.

Wyoming’s Bureau of Land Management will offer 84,015 acres of federal land in Wyoming in an oral oil and gas lease auction on Tuesday, June 6, at the Holiday Inn in Cheyenne. The sale includes a total of 128 parcels, including 13 parcels totaling 12,495 acres in the Bridger Teton National Forest and two parcels totaling 1,526 acres in the Shoshone National Forest. “Mineral resources on Wyoming public lands play a key role in meeting energy demands in the Rocky Mountain Region. With one-third of the nation’s oil and gas production coming from the public lands, oil and gas leasing helps increase domestic production of clean-burning natural gas and other mineral resources,” said Wyoming BLM State Director Bob Bennett. Oil and gas operations on BLM-administered lands in Wyoming produced 29.8 million bbl of oil and 1.4 Tcf of gas in 2005. About 64% of the homes in Wyoming are heated with natural gas. The auction rules call for a $2 per acre minimum bid in bonuses on any parcel. This means a buyer will pay the bid price for the right to obtain the federal lease, in addition to a standard $1.50 per acre rental on the lease. BLM also will charge winning bidders $130 per parcel to help cover administrative costs. If the lease becomes producing, the federal government will collect a royalty on production. Last year, $799.2 million in royalties were collected and shared equally with Wyoming. Leases are for a primary term of 10 years, and will be continued as long thereafter as oil or gas is produced in paying quantities. The complete list of parcels is available on the Wyoming BLM web site at: www.wy.blm.gov/minerals/og/leasing/oilgasleasing.html.