Impact

The growing alarm about the impact that hedge funds are having in the natural gas futures market is largely unfounded, FERC Chairman Pat Wood, CFTC Chairman Sharon Brown-Hruska and Nymex Chairman Mitchell Steinhause said in three separate letters to Rep. John D. Dingell (D-MI), ranking member on the House Committee on Energy and Commerce.

About 30 major regulatory and environmental impediments to natural gas production have taken substantial amounts of supply off the market at a time of rapidly increasing gas demand, according to a new report titled “Environmental Policy and Regulatory Constraints to Natural Gas Production” by the Department of Energy’s (DOE) Argonne National Laboratory.

A group of large industrial natural gas consumers has called on the Commodity Futures Trading Commission (CFTC) to assess the potential negative influence of hedge fund activity on volatility and gas prices and to recommend to Congress statutory changes that are needed to properly oversee hedge fund market players.

Late summer storms weighed on U.S. exploration and production companies in the third quarter, pushing down oil and natural gas output in North America for most of the largest producers. On Friday, ChevronTexaco Corp. and Anadarko Petroleum Corp. both reported strong earnings but mediocre production, while Pioneer Natural Resources reported mediocre income — because of tax changes — but stronger U.S. natural gas output.

Late summer storms weighed on U.S. exploration and production companies in the third quarter, pushing down oil and natural gas output in North America for most of the largest producers. On Friday, ChevronTexaco Corp. and Anadarko Petroleum Corp. both reported strong earnings but mediocre production, while Pioneer Natural Resources reported mediocre income — because of tax changes — but stronger U.S. natural gas output.

BP plc’s third quarter oil and natural gas production is up 11% from the same period a year ago, but lower sequentially from the second quarter because of annual facilities maintenance and shut-ins from Hurricane Ivan, the company said last week. The London-based major, which is scheduled to report 3Q earnings on Oct. 26, still expects average production for 2004 to meet a previous target of at least 4 MMboe/d.

ConocoPhillips said Tuesday that expected seasonal declines and scheduled maintenance activities in North Sea and Alaskan operations will send third quarter oil and natural gas production 7% lower sequentially over second quarter output. The company will issue its quarterly report on Oct. 27.

BP plc’s third quarter oil and natural gas production is up 11% from the same period a year ago, but lower sequentially from the second quarter because of annual facilities maintenance and shut-ins from Hurricane Ivan, the company said Monday. The London-based major, which is scheduled to report 3Q earnings on Oct. 26, still expects average production for 2004 to meet a previous target of at least 4 MMboe/d.

With Hurricane Ivan’s initial impact on production already factored into the market, and it being too soon to assess damage to Gulf infrastructure, October natural gas futures resumed their pre-Ivan path lower on Wednesday.