Midday

As of midday Tuesday, the U.S. Department of the Interior’s Minerals Management Service (MMS) Gulf of Mexico Outer Continental Shelf Region had received 407 bids on 335 tracts from 52 companies in its highly anticipated Western Gulf of Mexico Lease Sale 187. The lease sale is scheduled for 9 a.m. CST at the Sheraton New Orleans Hotel in New Orleans. The sale will be webcast through GoGulfTV at www.gogulf.net and through the Offshore Oil Scouts Association at www.oosa.com.

After a strong opening yesterday, gas futures were hit with awave of selling, pressuring the market down to a $2.19 midday low.From there the February contract limped mostly sideways until alate, short-covering rally trimmed losses into the close. Theprompt month finished at $2.244, down 1.6 cents for the day.

Despite a round of midday profit taking, the natural gas futuresmarket was able to eke out a modest advance amid continued see-sawtrading activity yesterday. The September contract led all othermonths, posting a 1.9-cent gain en route to a $2.727 close.Estimated volume was robust with 86,261 contracts changing hands.

A run-up in citygate prices in the Northeast that had startedlate Wednesday afternoon was falling back rapidly by middayThursday, but not before some buyers had paid more than $3 intoTransco Zone 6-New York City. A trader reporting $3.00-$3.25 salesfor Zone 6-NYC said he had received a late offer of $2.65. TexasEastern M-3 numbers also were coming off hard, another source said.