Losses

The cash market was approximately evenly divided between higher and lower points Friday, but taking into account the losses being much larger than the gains, it was definitely an overall down day.

Triple-digit losses were common in the Midcontinent and West, while CenterPoint-East traded as low as 20 cents and averaged less than a dollar, as all points took a dive Friday. Prices were dragged lower by moderate mid-fall weather either in place or approaching in many areas, the previous day’s plunge of 34.7 cents by December futures and the drop of industrial load associated with a weekend.

Price movement was close to evenly mixed in Thursday’s trading of month-ending supply, but it appeared that losses slightly outnumbered gains. Despite warming trends, there was still a bit of heating load for Friday in parts of the Northeast, Midwest, eastern South and Pacific Northwest, and cash quotes had extra support from November’s expiration-day gain of 28.3 cents Wednesday.

As the stock market suffered its eighth straight day of losses Friday and the Dow flirted with the 8,000 mark, several more domestic oil and natural gas producers reported that they were cutting their planned capital expenditures (capex) for the rest of the year and/or 2009 and were rolling back their drilling programs or postponing planned acquisitions in order to preserve capital liquidity. Producers said they also had taken steps to shore up their bank credit lines.

One day after the Dow Jones Industrials recorded one of the largest single-day point losses ever, the feeling on Tuesday was that investors might have gotten a little bit carried away. Bargain hunters rushed to Wall Street and to commodity markets on Tuesday, resulting in significant climbs on the day.

Prices fell across the board again Friday, with some losses in the Midcontinent and West expanding to triple-digit levels. Seasonal shoulder-month weather in most areas (with its relative lack of weather-based load) and the usual weekend loss of industrial demand drove the continuing softness. The previous day’s 4.5-cent gain by October futures provided scant support for cash numbers.

Energy traders were blindsided Friday as the surging prices across the board on Thursday transformed into even larger losses to finish the week. After a two-day stay north of $8, September natural gas futures plunged below the psychological support level, recording a new low for the down move of $7.768 before closing at $7.843, down 40.9 cents on the day and 24.9 cents lower than the previous week’s finish.

Flat or near-flat quotes were common in the East while much of the West was racking up some sizeable losses Thursday. Mixed price moves that had been mostly higher the day before became mostly lower as the cash market weighed the potential of Tropical Storm Fay causing offshore shut-ins and prior-day futures support against light cooling load in many areas.

Three weeks after parent company SemGroup LP filed for bankruptcy on $3.2 billion in trading losses in crude deals on the New York Mercantile Exchange and over-the-counter energy derivative markets (see Daily GPI, July 28; July 24), SemGroup Energy Partners LP (SGLP), the only publicly traded subsidiary of SemGroup, announced through a Friday filing with the Securities and Exchange Commission (SEC) that it is in a spot of bother as well and might have to sell a portion or all of its assets.