Managed

June natural gas prices worked lower amid a frenzy of selling in other petroleum markets. Natural gas traders see a pervasive interest by funds and managed accounts in pursuing the short side of the market, but they caution that any surprises could send prices sharply higher.

June natural gas futures eased, although a major contingent — funds and managed accounts — now appears to be aligned on the long side of the market and technical support remains intact. At the close June futures had fallen 2.3 cents to $4.670 and July was lower by 2.5 cents to $4.738. June crude oil cascaded lower giving up $2.47 to $111.05/bbl.

June natural gas futures showed little movement as traders see a market driven by short-covering by funds and managed accounts rather than any fundamental development that could provide a sustainable base for further gains. By the end of the day June had eased half of a penny to $4.693 and July had risen two-tenths of a penny to $4.763. June crude oil dropped 41 cents to $113.52/bbl.

Oklahoma Gov. Mary Fallin (R) signed the 2011 Shale Reservoir Development Act into law on Wednesday. The measure is designed to protect stakeholders, clarifies the jurisdiction of the Oklahoma Corporation Commission (OCC) and modifies the state’s oil and gas laws to address advances in technology.

Natural gas futures carved out a modest gain Wednesday as aggressive fund trading managed to prevail over short-term traders looking to sell the market lower. At the close May had gained 4.3 cents to $4.141 and June was up 3.8 cents to $4.206. May crude oil added 86 cents to $107.11/bbl.

April natural gas futures managed to hold on to Thursday’s gains and closed slightly higher Friday, although traders are still thinking prices will eventually head back down to the mid $3 area. By the close of trading April futures had risen 1.0 cent to $4.168 and May had gained 1.2 cents to $4.246. April crude oil shed 35 cents to $101.07/bbl.

A trade group representing oil and natural gas producers is taking steps to create a Center for Offshore Safety, which mirrors the industry-managed offshore safety institute proposed by the presidential commission on the BP plc oil spill earlier this year (see Daily GPI, Jan. 12). The API’s action comes only days after the Interior Department made its first move towards creating an offshore energy safety institute.

A trade group representing oil and natural gas producers is taking steps to create a Center for Offshore Safety, which mirrors the industry-managed offshore safety institute proposed by the presidential commission on the BP plc oil spill earlier this year (see NGI, Jan. 17). At the same time, the Interior Department has picked members of an ocean energy advisory panel who have been tasked with providing advice on how best to establish a safety institute within the department. The industry and Interior safety efforts are separate, but related.

April futures were confined to a narrow range Friday but managed to eke out a modest gain. The massive earthquake in Japan found its way into crude oil and natural gas trading, and the unwinding of long crude oil and short natural gas positions prompted a firm tone to the market.