Lift

With sustained higher natural gas and oil prices, and with expected permit approval for Powder River Basin exploration — which could lift natural gas and oil production 6-10% this year — MDU Resources Inc. on Tuesday raised its full-year 2005 earnings guidance.

To no one’s surprise, prices extended their losing streak since midweek into the weekend with across-the-board declines. Below normal temperatures in most areas outside the West Coast and Southwest, storage-related futures weakness the day before, and the continuing recovery of Gulf of Mexico production from storm shut-ins made Friday’s softening a foregone conclusion, sources said.

Gradually strengthening hot weather fundamentals solidified the post-weekend price rally Tuesday, putting all points into the rising column and creating larger gains than the day before in the Gulf Coast, California and Rockies. Upticks ranged from about a nickel to 20 cents.

Despite the rising storage surplus, natural gas prices have been increasing over the past three months, but a “good share” of the higher prices has followed the rising price of oil, noted Stephen Smith Energy Associates. However, if oil prices remain in the mid-$30s/bbl range and there is a warmer-than-normal summer, gas prices could reach as high as $6.50-7.00/Mcf in July and August, Smith said.

Despite the rising storage surplus, natural gas prices have been increasing over the past three months, but a “good share” of the higher prices has followed the rising price of oil, noted Stephen Smith Energy Associates. However, if oil prices remain in the mid-$30s/bbl range and there is a warmer-than-normal summer, gas prices could reach as high as $6.50-7.00/Mcf in July and August, Smith said.

Hurricane Isabel, packing super-powerful maximum sustained winds of nearly 140 mph and pointing at shooting the gap between southern Florida and Cuba, was accorded most of the credit Wednesday for rallying cash prices and sustaining a futures run-up. Cash market movement ranged from flat to slightly more than a dime higher. Most of the smallest gains were clustered at California and Rocky Mountains/Pacific Northwest points, which tend to be least affected by hurricane disruptions of offshore supply.

Bucking the trend that has brought other companies’ merchant operations to the brink of disaster, New Orleans-based Entergy Corp. on Tuesday reported that its energy trading earnings for the fourth quarter were up 33% from the same period of 2001, while overall, quarterly earnings rose more than 25%.

Algonquin will lift Wednesday a Critical Notice that was posted Jan. 20. It anticipates that operating conditions will allow a limited amount of due-shipper imbalance make-up gas to be scheduled.

Algonquin said requests for service had decreased enough that it was able to lift all restrictions through the Cromwell (CT) Compressor Station Thursday. A limited amount of due-shipper imbalance make-up gas is available, the pipeline said. However, it added that forecasts indicate a protracted period of cold weather settling into the Algonquin service area, during which it will be particularly important that shippers balance receipts and deliveries.