Raises

Despite failing miserably in their prior $8/MMBtu gas price predictions for this summer and fall (see Daily GPI, June 29), analysts at Raymond James & Associates said in their “Stat of the Week” that once the weather returns to normal, bullish gas market fundamentals will again push prices sharply higher. As a result, the analysts have raised their gas price forecast for 2005 yet again to $6.65 from $6.25. They also bumped up their crude oil price forecast for the fourth quarter to $40/bbl from $36.

PG&E Corp. on Tuesday said that it has entered into a settlement with its National Energy & Gas Transmission Inc. (NEGT) subsidiary to resolve claims that PG&E is obligated to compensate NEGT for tax savings resulting from the incorporation of losses and deductions related to NEGT or its subsidiaries in the utility’s consolidated federal income tax return.

The unexpected increase in oil prices in the second quarter has boosted the third quarter natural gas forecast by management consultant R.W. Beck. Last Tuesday, Beck revised upward its prediction of the annual average price at Henry Hub by 50 cents/MMBtu to $5.86.

Devon Energy Corp. increased its oil and natural gas production 11% in the second quarter, and pulled up North American production in nearly every category on the strength of its April 2003 merger with Ocean Energy (see Daily GPI, April 28, 2003). The largest U.S.-based independent also reported profits up 41% on higher commodity prices.

The unexpected increase in oil prices in the second quarter has boosted the third quarter natural gas forecast by management consultant R.W. Beck. On Tuesday, Beck revised upward its prediction of the annual average price at Henry Hub by 50 cents/MMBtu to $5.86.

Successful drilling programs in East Texas, the Arkoma Basin and the River Ridge discovery in New Mexico helped Southwestern Energy Co. grow its natural gas and oil production 25% in the second quarter. The Houston-based independent reported its production reached 12.6 Bcfe in the quarter, up from 10.1 Bcfe a year earlier. Output was also up sequentially from the first quarter’s 11.4 Bcfe.

With speculation on potential disruptions in global crude supplies driving spot and futures markets, Fitch Ratings last Monday raised its natural gas price deck to $5.75/Mcf this year and to $4.50 in 2005. Fitch also pushed oil higher, to $34/bbl this year and to $27 in 2005.

With speculation on potential disruptions in global crude supplies driving spot and futures markets, Fitch Ratings on Monday raised its natural gas price deck to $5.75/Mcf this year and to $4.50 in 2005. Fitch also pushed oil higher, to $34/bbl this year and to $27 in 2005.

The Energy Information Administration (EIA), in its Short-Term Energy Outlook for June, again raised its projection for the average spot price of natural gas this year — by 7% to an average of $6.20/Mcf from the $5.80/Mcf that it had projected last month.