Modestly

Raymond James & Associates Inc. energy analysts last week modestly reduced their near-term outlook for U.S. drilling activity and raised expectations for 2013, but only slightly. Drilling activity in the coming year still is “much lower than consensus expectations,” but the natural gas rig count should begin to stabilize.

Raymond James & Associates Inc. energy analysts on Monday modestly reduced their near-term outlook for U.S. drilling activity and raised expectations for 2013, but only slightly. Drilling activity in the coming year still is “much lower than consensus expectations,” but the natural gas rig count should begin to stabilize.

February natural gas closed modestly higher Tuesday as prices generally ignored soaring oil and equity markets and posted an ominous new low during the session. Traders suggested that further price declines were likely. At the close February had risen 0.4 cent to $2.993 and March had inched higher 0.6 cent to $3.022. February crude oil bounded higher by $4.13 to $102.96/bbl.

December natural gas settled modestly higher Tuesday as traders prepared for a double whammy in the form of a government inventory report and options expiration Wednesday. In addition, December futures expire Monday following an extended holiday period. At the end of the day December had added 1.6 cents to $3.415 and January had tacked on 0.3 cent to $3.561. January crude oil added $1.09 to $98.01.

Although small losses were slightly dominant, a sizeable number of flat to modestly higher locations kept cash market movement mixed Monday. Most severely hot weather with triple-digit highs was still confined to the south-central and Southwest sections of the U.S., and although the South could expect to keep peaking in the low to mid 90s, that represented merely seasonal to slightly below-normal conditions for August.

July natural gas futures moved modestly higher Monday as options expired and traders saw the market holding its own. Recent data shows money managers favoring the “sell” side of the trading ledger. At the close July had risen 2.7 cents to $4.256 and August was up 1.4 cents to$4.264. August crude oil slipped 55 cents to $90.61/bbl.

Canadian natural gas exports, defying consensus forecasts of shrinkage, held firm and even increased modestly during first quarter of 2011, the U.S. Department of Energy (DOE) said.

Canadian natural gas exports, defying consensus forecasts of shrinkage, held firm and even increased modestly during first quarter of 2011, the U.S. Department of Energy (DOE) said.

Despite modestly weaker futures guidance (down 2.6 cents on the previous Friday), the cash market recovered to a large extent Monday from major softness late last week. Gains highly dominated numbers that seldom varied more than a few pennies up or down from unchanged.