Movement

The start of the November aftermarket saw a decidedly mixed bag of price movement Thursday. Compared with last-of-October numbers, Nov. 1 pricing ranged from about half a dollar lower (San Juan Basin) to a little more than a dime higher (SoCal border), with many gradations between those extremes. Overall, the negative changes outweighed the positive ones.

Tropical Depression Ten was churning south of Jamaica Tuesday evening and was poised to become a Tropical Storm in the next 24 hours, according to the National Hurricane Center. The storm contributed to a sharp rise in futures prices Tuesday — the October contract soared to a high of $3.69 — but failed to produce much of an effect on cash prices until very late trading. Most cash points were flat to up or down a few cents on average.

A ranking of top power marketers by first quarter sales volumes shows very little movement among the ranks from the fourth quarter and a continuing increase in volumes, which were up 72% from the first quarter of last year, according to data collected by Energy Performance Review and NGI. However, the picture should change significantly this year as the market begins to shrink, trading counterparties are reduced in number, companies scale back their trading volumes due to closer scrutiny by regulators and the removal of “round-trip” or “wash” trades, and some companies exit the marketing and trading (M&T) business entirely, according to industry experts.

The November aftermarket started out with a hodgepodge of price movement compared with both first-of-month indexes and end-of-October numbers. Generally the West could be characterized as moderately stronger in both instances Wednesday, while eastern points tended to range from flat to a few cents lower. But there were discrepancies, primarily in the East where scattered points realized gains from gas traded for Oct. 31 flow.

Prices for natural gas and crude will shoot up in the short term, but the upward movement isn’t likely to be sustained for the longer term in the wake of last Tuesday’s terrorist attacks that destroyed the World Trade Center in New York and badly damaged the Pentagon near Washington D.C., according to Raymond James & Associates.

Price movement ranged from essentially none to nearly a dime higher for most points Thursday. Small declines at Northeast citygates and larger ones for the PG&E citygate and California border-SoCal gas were the exceptions in one direction, while upticks of 15-20 cents or so more for Malin and intra-Alberta broke the pattern in the other direction.

Following recent movement by some of their peers, top industry analysts with Salomon Smith Barney (SSB) and Merrill Lynch downgraded their 2002 forecasts for several U.S. exploration and production (E&P) company stocks late last week. SSB’s Robert Morris also decided to lower his natural gas price forecast for 2002, while Merrill Lynch’s Donato Eassey stuck to his gas price projections.

New price movement was close to non-existent in almost the entire cash market Wednesday. Only a PG&E citygate uptick, a border-SoCalGas decline and mild Rockies softening provided variation in what was otherwise near-uniform flatness.

The Christmas weekend market was a true hodgepodge of pricemovement. Friday’s changes ranged from more than $2 lower in theNorthern Natural Gas market area, despite a pipeline OFO still ineffect after nearly two weeks, to more than $2 higher in both ofTransco’s Zone 6 pools. Other points were arrayed at variouspositions in between, but most were flat to 20 cents down.