Measly

Worldwide upstream investment of 228 oil and gas producers increased 45% to $401 billion in 2006, more than $1 billion per day, but the record capital spending generated a measly 2% increase in reserves volumes, according to a review by researcher John S. Herold Inc. and upstream adviser Harrison Lovegrove & Co. Ltd.

The Energy Information Administration (EIA) reported a “measly” 186 Bcf storage withdrawal for the week ending Jan. 26, stunning many market prognosticators who were looking for a draw closer to, or even greater than, 200 Bcf. The March futures contract immediately plummeted more than 20 cents in reaction to the news to $7.435 as of 10:54 a.m. EST. March ended the day down 13.7 cents at $7.530.

Following on the heels of Thursday’s measly one-day, 0.2-cent price retracement, natural gas bears were up to their old tricks Friday as they pressured the futures market to a gap lower open on the daily charts. However, that would prove to be just about the extent of the selling because prices were able to ratchet higher from that point forward as traders covered shorts amid constructive weather outlooks. The October contract finished 1.5-cents weaker at $2.38 in holiday abbreviated trading.

“Orderly” and “quiet” are not words that typically describe thenatural gas futures market-especially during hectic expiration-daytrading at Nymex. However, yesterday they were fitting descriptionsof a market that was only able to inch higher amid light commercialshort-covering. The June contract closed out its tenure as theprompt month with a 2.6-cent gain to settle at $2.226.

The near two-week futures rally from an apparent winter lowcontinued yesterday during the regular trading session helped by amajor winter storm that swept through the Midwest, Mid-Atlantic andNortheast and about a dime rise in cash prices. The April contractbroke through strong resistance and posted a new high of $1.965before backtracking to a low of $1.885 and then rebounding to closethe day up 1.3 cents at $1.941/MMBtu. A less-than-expected storagewithdrawal of 69 Bcf, however, helped push futures down sharplyduring the overnight Access trading session. As of 6:30 p.m. (EST),April was down 4.1 cents from the close to $1.900.