Prices

Even in the midst of a brewing international oil crisis and the state’s skyrocketing gasoline prices at the pump, Californians are expanding their organized opposition to proposed offshore liquefied natural gas (LNG) terminals along the state’s southern Pacific Coast. Hoping to head off the ground swell, One proponent already has scheduled community information meetings later this month in Oxnard and Malibu, CA, the onshore entry point for a terminal 22 miles offshore.

After failing to move above last week’s high despite a positive open, the natural gas futures market turned lower Monday as speculative traders reestablished short positions. Concerns that this week’s storage report will feature a small net drawdown also added to the bearish price sentiment, prompting buyers to pull back their bids.

Even in the midst of a brewing international oil crisis and the state’s skyrocketing gasoline prices at the pump, Californians are expanding their organized opposition to proposed offshore liquefied natural gas (LNG) terminals along the state’s southern Pacific Coast. Hoping to head off the ground swell, One proponent already has scheduled community information meetings later this month in Oxnard and Malibu, CA, the onshore entry point for a terminal 22 miles offshore.

As one source had expected (see Daily GPI, March 4), the combination of Wednesday’s screen dive and generally mild weather forecasts resulted in spot market weakness Thursday. All points were close to united in recording drops from a dime to about a quarter; most were in the mid to upper teens.

Production shortfalls in South Texas assets and high natural gas prices forced El Paso Corp. to slash its proved oil and gas reserves by 41% following an independent review, which will lead to a fourth quarter pre-tax ceiling test charge of at least $1 billion, the company said Tuesday.

Despite continuing $5-plus gas prices, Lehman Brothers is forecasting another year of poor domestic gas production results in 2004 after an estimated 3% drop in 2003. The Lehman Brothers production estimates, however, have a track record of showing an entirely different picture from the one laid out over the last six years by the federal government.

Weighed down by falling cash market prices, the natural gas futures market slipped lower Wednesday as traders took profits following a two-day, 90-cent rally earlier in the week. Bearish expectations ahead of Thursday’s storage report were also seen as a factor, and the market was quick to react with a gap-lower opening Wednesday morning. The February contract finished at $6.878, down 20.4 cents for the session.

After rallying Wednesday because some areas would be turning colder by the weekend, prices seemed to be having second thoughts about the situation Thursday. The result was a cash market resembling the ones that ended last week and began this week: a mixture of moderately higher and lower numbers that was dominated by declines.

After opening lower in sympathy with weaker cash prices, the natural gas futures market worked its way back to unchanged Monday as traders groped for fair value amid contrasting weather outlooks.