Loss

The U.S. natural gas rig count is falling, as expected, but the horizontal drilling rig count has begun to markedly decline, with the Dec. 26 report indicating the largest single-week loss for the shale-directed rigs since 1991.

Cash prices fell across the board Wednesday, succumbing to the previous day’s half dollar-plus futures loss along with moderate warming trends continuing through Thursday in most of the East and temperatures largely holding steady in much of the West.

Due to the loss of compression and capacity, Sabine Pipe Line declared a force majeure Wednesday as it removed the unit at the Port Neches Compressor Station in Jefferson County, TX, from service for needed maintenance. Repairs are expected to be completed within 48 hours, Sabine said. Three points are affected by the work.

TEPPCO Partners LP subsidiary TEPPCO Crude Oil LLC is not one of 11 SemGroup LP creditors that alleged that unauthorized energy trading may have caused SemGroup’s $3.2 billion loss — contrary to what was reported in Daily GPI articles on July 24 and July 29 titled “SemGroup Implosion Brings More Questions than Answers” (see Daily GPI, July 24) and “Pioneer Natural Resources Latest to Be Bit by SemGroup Downfall” (see Daily GPI, July 29). NGI regrets the error. As reported previously, TEPPCO does not expect any future material impact from the SemGroup bankruptcy nor does it expect any future material credit exposure to SemGroup.

After riding the roller-coaster of a session Monday up to a $9.595 high only to return to the station with a 2-cent loss at $9.346, natural gas futures traders were content to mostly sit on the sidelines Tuesday, perhaps in an effort to recover from motion sickness. The April contract traded in a quiet 18-cent range between $9.270 and $9.450 before closing out the day at $9.353, up less than a penny.

Natural gas futures added to Friday’s gains in active trading Monday on the New York Mercantile Exchange. Petroleum markets were not at a loss for market-moving developments, and gains were scored across the floor from crude oil to natural gas to petroleum products.

Forecasts of moderate to cool weather in many areas, the previous day’s 8.4-cent decline in November futures and the loss of industrial load over a weekend led to price declines at all but one point Friday. With Questar’s Clay Basin storage facility shut in for testing through the middle of this week, Rockies quotes once again took the biggest hits.

The 2008 retirement of veteran Sen. Pete Domenici (R-NM), a key figure in shaping energy policy over the years, will be a major loss to the oil and natural gas industries.

Prices fell at nearly all points Thursday, depressed by the previous day’s 15-cent loss by November futures, relatively light weather-based load and the fact that a low-pressure system in the north-central Gulf of Mexico (GOM) is not only failing to strengthen but also is not having any perceptible impact on offshore operations.