Leads

A federal offshore natural gas and oil lease sale — the fifthlargest in 10 years — was completed last month for blocks in thewestern Gulf of Mexico, with $153.6 million in high bids.Houston-based Kerr-McGee Oil & Gas Corp. and its partners werethe highest bidders on 22 blocks worth $16.3 million.

A federal offshore natural gas and oil lease sale — the fifthlargest in 10 years — was completed yesterday for blocks in thewestern Gulf of Mexico, with $153.6 million in high bids.Houston-based Kerr-McGee Oil & Gas Corp. and its partners werethe highest bidders on 22 blocks worth $16.3 million.

The cash market was relatively quiet Monday, and for quite a fewtraders, dismayed by last week’s hypervolatility, that suited themjust fine. Points in the East tended to range from flat to about anickel or so higher, while the West was considerably stronger withadvances of about a dime or more in most cases.

“Wanted: entry-level workers, roustabouts, floorhands, mechanicsand electricians. Training, benefits provided.” It’s a virtualposting in drilling companies’ offices across North America.Unemployment is so low, and jobs so plentiful across nearly everyjob sector that finding potential employees who are willing to workfor low-end wages in the oil and gas industry has reached acritical stage.

Prices returned to a fairly strong upward track in most marketsThursday except for the Rockies and California, where an extendedhigh-inventory OFO by PG&E put a damper on things.

After a lengthy absence, “following the screen” was back invogue Friday among trader explanations for cash market movement.”How else are you going to justify rising Northeast prices for whatis normally a lower-demand weekend period?” asked a largeaggregator. A stormy front was moving beyond the East Coast intothe Atlantic, but the temperatures it left behind were still on themild side for December, he observed.

The cash market made a strong rebound Monday from the weekend’sprice plunge as nearly every point rose by 15 cents or more. Inmost cases the gains did not recover all of the price territorythat had been lost Friday. However, the Northeast—one of the fewregions seeing any weather close to resemblingwinter —didmanage to make up for just about all of Friday’s citygate declines.

Most of the overall swing market was mildly higher Tuesday, withwestern-especially Rockies-points tending to exhibit the most pricestrength with gains of up to a dime. A few PG&E citygate quotessurpassed $3, marking the first time that area has been hit (inU.S. dollars) since Transco Zone 6-NYC topped out at $3.02 forSept. 15 flows.

What had seemed like a mildly softer early aftermarket in swingdeals done Tuesday got much weaker Wednesday. Influenced greatly bya falling screen but also by a continuing lack of positivefundamentals, nearly all points were down a dime or more. NorthernCalifornia was a rare bastion of relative market strength in theU.S. Malin and the PG&E citygate dropped only about a nickel asPG&E repeated last week’s unusual action of issuing alow-inventory OFO on a summer weekday.