Prompt

The futures market opened lower on Thursday, but aftersustaining an initial round of selling, the prompt month managed toclaw its way back up to $1.817, a 0.2 cent decline for the day.That left the September contract still perched just above long term support at $1.78 yesterday, trading within a narrow 4-cent range.Estimated volume registered an unremarkable 40,943.

Weak gas processing margins prompted Mitchell Energy &Development to cut its natural gas liquids (NGL) production by morethan 20% – roughly 10,000 barrels/d. “With the collapse in thecrude oil market, gas processing margins are pretty ugly rightnow,” said George P. Mitchell, CEO. “NGLs have tracked the slide incrude prices due to weak demand and higher imports. Strong gasprices are adding to the squeeze in processing margins since makingup the volume shrinkage that occurs when we extract the liquids isa cost. With NGL inventories in the U.S. running at 10-year highs,we decided to cut back where it makes economic sense.

Cash numbers were softening as expected Thursday, following theprompt of the futures screen’s late downturn Wednesday. But itlooks like it’s already time to reverse field again and head upwardtoday based on the screen’s strong gain Thursday, sources said.