Largely

Williams credited strong results in all of its core gas businesses and the absence of a $248.7 million litigation charge in 2Q2006 for substantially improved second quarter results. Net income was $433.1 million (71 cents/share) compared with a net loss of $76 million (-13 cents/share) in 2Q2006.

Williams credited strong results in all of its core gas businesses and the absence of a $248.7 million litigation charge in 2Q2006 for substantially improved second quarter results. Net income was $433.1 million (71 cents/share) compared with a net loss of $76 million (-13 cents/share) in 2Q2006.

Largely due to the previous day’s futures drop of nearly 31 cents, cash prices were down at most points Wednesday. The setbacks occurred despite gradually rising cooling load in the Northeast and in some parts of the South. Flat to about 40 cents higher quotes at several points, primarily in the Rockies, extended mixed price movement for another day.

According to the latest American Customer Satisfaction Index (ACSI), satisfaction with energy utilities improved by 1% from a year ago, largely due to lower prices, particularly for natural gas. Contributing to the improvement was milder winter weather in many parts of the country and an easing of gas prices. With prices dropping and less gas needed for heating, utilities that offer gas service only or in combination with electric service gained the most in customer satisfaction scores.

According to the latest American Customer Satisfaction Index (ACSI), satisfaction with energy utilities improved by 1% from a year ago, largely due to lower prices, particularly for natural gas. Contributing to the improvement was milder winter weather in many parts of the country and an easing of gas prices. With prices dropping and less gas needed for heating, utilities that offer gas service only or in combination with electric service gained the most in customer satisfaction scores.

Friday’s cash trading activity was largely a repeat of that on Thursday: mixed price movement with most points averaging flat or only a few pennies up or down and small gains handily outweighing small losses. Frigid weather outside the South and a five-trading day streak of prior futures advances (which barely got extended by 2.8 cents Friday) were the chief impetus for overall slight firmness.

Slightly lower-than-expected oil and natural gas prices and “largely negative” interim updates led energy analysts with Friedman, Billings, Ramsey & Co. Inc. (FBR) to reduce their 4Q2006 earnings forecasts on the integrated producers by 6%. The quarterly forecasts are now 13% below consensus expectations, FBR noted.

U.S. natural gas production in 3Q2006 increased 5.5% year over year — an improvement largely reflective of hurricane-related recovery, according to energy analyst John Gerdes. However, Gerdes’ survey also noted 2.2% production growth compared to 2Q2006, suggesting that overall, domestic gas production may rise about 2% this year, or 1 Bcf/d.

With mother nature largely in control of the natural gas market, forecasting prices can be a real headache. Winter Henry Hub prices (November-March), for example, could average anywhere from $4 to $11.50, depending on whether temperatures are 13% warmer than normal or 12% colder than normal this winter, Energy and Environmental Analysis Inc. (EEA) said in its latest Monthly Gas Update. EEA’s best guess is an $8.48 winter average at the hub.