Outlook

While continuing to be a rare island of financial strength and stability in turbulent energy times, San Diego-based Sempra Energy, faces some large financings and increased risks because of the “California effect” on power market deals, difficulties in energy trading and problems with some South American distribution utility ventures, according to a report issued Tuesday by CreditSights, a London-based independent financial analysis firm.

Despite the brouhaha in both Washington, DC and Wall Street on the dire outlook for natural gas in North America, a potential shortage — as in an inability to refill storage — is “extremely unlikely” for the coming winter heating season, said Credit Suisse First Boston (CSFB) analysts in a new report.

After gapping lower for the second session in a row and reaching a new two-week low, natural gas futures rebounded at the close Wednesday amid a wave of expiration-day short-covering. The June contract initially dipped into the $5.70s early Wednesday, but a short-covering rally ended up boosting the contract to a final settlement of $5.945, up 4.5 cents for the session and 74.5 cents above where June began its tenure as prompt contract a month ago. Comparatively, May 2003 closed 82.2 cents lower at $5.123.

BP p.l.c. reported record first quarter results of $3,729 million compared with $1,582 million a year ago, a 136% increase, spurred by a large jump in exploration and production’s volumes and prices, and increases across the board in natural gas and power trading, oil refining and chemicals.

Although there are lingering risks, San Diego, CA-based Sempra Energy received a boost in its outlook Wednesday from Credit Suisse First Boston (CSFB). Analysts at CSFB predicted that the company will “outperform” previous estimated earnings and stock prices in 2003.

Although officially spring on the calendar, it was still winter Monday if you live in the upper Midwest, the Northeast, or trade natural gas futures.

Swing prices continued to erode moderately Wednesday as a mild short-term weather outlook and expectations of a reduction in the storage deficit weighed on the market. A largely static natural gas screen had little influence, although crude oil and heating oil futures were realizing gains.

A new report by the U.S. Geological Survey (USGS) shows an overall slightly improved outlook for unconventional natural gas potential in five “priority” Rockies basins.

A new report by the U.S. Geological Survey (USGS) shows an overall slightly improved outlook for unconventional natural gas potential in five “priority” Rockies basins.