Little

The downhill run for cash prices got a little steeper Wednesday, and any potential leveling off space remained beyond the horizon. Declines tended to range from about a nickel to 15 cents, but most were a dime or more. Once again, Rockies pipes either experienced less softening than the general market or even ranged from flat to a smidgen higher in a few cases as the region remained a bit warmer than most of the nation, although a mild cooling trend was under way.

With little in the way of fresh fundamental or technical impetus, natural gas futures drifted sideways and lower Tuesday as traders elected to wait for a clearer supply-demand picture to develop. The September contract remained within an extremely tight 5.5-cent range, well beneath Monday’s gap lower open, but safely above support in the $3.03-10 area. At the closing bell, September was 1.7 cents weaker at $3.17.

A little more than half of Destin Pipeline’s recent throughput of about 800 MMcf/d was cut Friday due to an outage of one of the processing trains at the BP Amoco-operated plant in Pascagoula, MS, according to a Destin spokesman. He said the train was expected to be returned to service by Saturday.

With little on either the technical or fundamental news front, natural gas futures shuffled sideways and lower yesterday, as traders weighed moderating temperatures against the potential for a bullish storage report Wednesday. At the closing bell the September contract was 4.1 cents lower at $2.999. The 12-month strip suffered only a minor setback, down 1.6-cents at $3.443.

What had seemed earlier to be a rather innocuous tropical wave, doing little more than providing lots of rain for the Florida peninsula, emerged as Tropical Storm Barry around midday Thursday and suddenly posed a very real threat to Gulf of Mexico production. Although most prices continued to soften Thursday, sources look for Barry to generate a rally in today’s trading for the weekend. The screen pointed the way upward for cash with a dime-plus gain Thursday.

Many observers were expecting a rebound yesterday, but got little confirmation that technical factors would support much of a change in direction. The August contract barely managed to halt the long decline. After slipping more than 22 cents in its first two trading sessions as the near-month contract, August struggled to muster a 2.1-cent daily gain, closing at $3.117, about a nickle off its daily high and 6.7 cents off its low of $3.050.

With little in the way of fresh fundamental signals from which to take a cue, natural gas futures took the path of least resistance lower Friday as traders pressured the market back below key support at $4.00. The July contract led the way, tumbling 5.9 cents to close at $3.979, just a tick off its $3.98 opening trade for the week. Estimated volume was extremely light, with just 39,677 contracts changing hands.

U.S. natural gas production and the nation’s vociferous demand could make it a little more dependent on imported gas if a recent long term forecast by a committee of the Independent Petroleum Association of America (IPAA) holds up. Natural gas demand is expected to increase to 30.7 Tcf by 2015, while U.S. production is only expected to get up to 24.8 Tcf over the same time period.

Lagging U.S. gas production and an ever-increasing demand could make the United States a little more dependent on imported gas if recent long-term forecasts made by a committee of the Independent Petroleum Association of America (IPAA) hold up. Natural gas demand is expected to increase to 30.7 Tcf by 2015, far outstripping the domestic production level of 24.8 Tcf that is anticipated for the same period.