Rapidly

Rapidly escalating natural gas costs claimed another casualty in the fertilizer industry on Thursday as Mississippi Chemical Corp. announced the shut-down of its Donaldsonville, LA, nitrogen complex. While the price of natural gas, a feedstock for some chemicals, continues to climb, there has not been a corresponding rise in chemical and fertilizer prices, and much of the nation’s fertilizer production has moved overseas.

Rapidly escalating natural gas costs claimed another casualty in the fertilizer industry on Thursday as Mississippi Chemical Corp. announced the shut-down of its Donaldsonville, LA, nitrogen complex. While the price of natural gas, a feedstock for some chemicals, continues to climb, there has not been a corresponding rise in chemical and fertilizer prices, and much of the nation’s fertilizer production has moved overseas.

Gulf of Mexico gas production was rapidly returning to normal Monday, with only about 2.6 Bcf/d remaining curtailed at 11 a.m. compared to 9.9 Bcf/d of shut-ins on Friday, the Minerals Management Service (MMS) reported. Most pipelines reported near normal throughput conditions, and spot prices in the Gulf Coast region were mixed with some points rising and others falling a few cents. However, at most other locations outside of the Gulf Coast region, spot prices were at least a nickle higher and as much as 30 cents higher in California.

With tropical storm threats fading rapidly and demand fundamentals staying on the weak side, cash prices ignored a major expiration-day rebound by October futures and continued to fall everywhere except in the Rockies Thursday. The Rockies gains were small at a dime or less, while losses elsewhere tended to range from about 2 cents in Northern California to nearly half a dollar at some Northeast citygates.

A 69 Bcf weekly storage injection and a rapidly strengthening tropical storm rumbling toward the Gulf of Mexico were enough to send natural gas futures higher Thursday morning as traders loaded up on long positions. The October contract gapped higher for the second session in a row and peaked at $3.97 moments after traders learned that the storage increase last week fell slightly short of expectations, the prior week’s injection and the injection reported during the same week last year. At 11 a.m. EDT, the October contract was 11.3 cents higher on the day at $3.90. It closed 6.9 cents higher at $3.856.

Amid muddled fundamentals and a rapidly improving technical situation, natural gas futures reversed direction Wednesday as local traders used Tuesday’s retracement as a springboard to new eight-week highs. A 10.8-cent gain in the September contract was trumped by an 11.3-cent rise in the October contract. The two months, which constitute the end of the seven-month summer strip and storage injection season, finished at $3.274 and $3.339 respectively. The only non-bullish factor Wednesday was estimated volume, which at 95,733 was a little on the low side.

Rapidly declining gas and oil prices, a weakening economy and higher operating costs pressured ExxonMobil Corp. earnings down 23% or $970 million, excluding merger effects, to $3.3 billion ($0.48 per share). Earnings per share declined by 20%. Domestic natural gas sales were off more than 16% from the same period last year.

The moderately softening status quo remained in effect for the cash market Thursday. Declines of about a dime or less prevailed at most points, although double-digit moves were reported for the Rockies/Pacific Northwest region. The smallest drops of less than a nickel were concentrated at cool Northeast citygates.

PPL EnergyPlus has outgrown its home and is searching for a new one to house its rapidly growing energy marketing and trading operations. The company said it is evaluating sites around the Lehigh Valley.