Look

One look at Nymex natural gas futures prices will tell yousupply is a little scarcer than consumers probably would like, andfirst quarter financial reports are confirming that production isdown from last year. Producer earnings soared during the firstquarter as a result of higher oil and gas prices, and lowerdomestic gas production should take some of the blame for the bullmarket.

The Federal Trade Commission (FTC) last week asked El PasoEnergy and the Coastal Corp. to pony up with more informationregarding their proposed merger. The companies confirmed therequest but wouldn’t say what the FTC is seeking. The commissionwould not comment, saying the case is ongoing. Analyst speculationwas that the FTC is looking at the companies combined power in theGulf of Mexico.

The Federal Trade Commission (FTC) has asked El Paso Energy andthe Coastal Corp. to pony up with more information regarding theirproposed merger. The companies confirmed the request but wouldn’tsay what the FTC is seeking. The commission would not comment,saying the case is ongoing.

Despite spring-like weather here, there and almost everywhere,this week’s price erosion came to a halt Thursday as many pointsturned in flat performances and a few managed small rallies.

For the third straight day, unseasonable weather teamed with afalling futures screen to land a knockout blow on price bulls’chins, as only a few cash points escaped losses of more than adime. A huge swath of high 60- to mid 70-degree temperatures acrossthe Rockies, Gulf Coast, Midcontinent and Northeast eradicated anywinter demand yesterday and caused traders to long for the golfcourse instead of the office. Adding fuel to the fire, forecastsare calling for similar weather for the rest of the week.

A preliminary look at the Canadian supply situation prior to thewinter heating season shows a greater amount of field gas availablethis year compared to last but less gas in storage and less gas onthe way, according to officials at TransCanada Pipelines.Meanwhile, market demand continues to be strong. The bottom line,said Al Jamal, manager of TransCanada’s Western CanadianSedimentary Basin Strategic Assessment, is “the supply-demandbalance is still tightening up” and will continue to do so given anormal or colder than normal winter and a continuation of flatdrilling activity.

A preliminary look at the Canadian supply situation prior to thewinter heating season shows a greater amount of field gas availablethis year compared to last, but less gas in storage and less gas onthe way, according to officials at TransCanada Pipelines.Meanwhile, market demand continues to be strong. The bottom line,said Al Jamal, manager of TransCanada’s Western CanadianSedimentary Basin Strategic Assessment, is “the supply-demandbalance is still tightening up” and will continue to do so given anormal or colder than normal winter and a continuation of flatdrilling activity.

Like a bouncing ball, natural gas futures continued to chopsideways yesterday as scale down buyers took advantage of lowprices afforded them by the market’s dip Wednesday. The Augustcontract finished up 3.3 cents at $2.179, and in doing so continuedits five-day streak of alternating advances and losses.

U.S. Senate Energy and Natural Resources Committee ChairmanFrank Murkowski (R-AK) is planning to take a closer look at thepotential impact on his home state and on the West Coast of theproposed merger of BP Amoco and Atlantic Richfield Co. Thecommittee has scheduled a hearing on June 24 at 9 a.m. to reviewthe merger. BP Amoco-Arco would hold 75% of the Alaska North Slopeoil fields and a similar share of the Trans-Alaska Pipeline System.It also would have control over 90% of the crude oil delivered tothe West Coast. Its property holdings in Alaska would far exceedthe maximum allowed by state law, although the companies said theyplan to divest some of their leases. The merger would create thelargest oil producer in the U.S. and the world’s second-largestpublicly traded oil firm, with a market capitalization of about$200 billion.