Rebound

There were no blizzards or major heat waves in the near-term sights of the weather radar, but spot prices managed to rebound by large amounts across the board Tuesday from the depths to which they had sunk on Friday. They did have support from both Friday’s 22-cent futures gain (which broke a string of downward sessions) and the return of industrial load from the extra losses it incurs on a holiday weekend.

Forecasts of very warm to sizzling weather Tuesday across quite a few market areas, along with the 14.5-cent rebound by futures Friday and the return of industrial load from its typical weekend decline, were able to raise cash prices at nearly all points Monday. The source of some of the demand was obscure, though, because cooling trends are due at some western locations in the South and Midwest.

Continuing the trend of back-and-forth swings ahead of expiration Wednesday, August natural gas futures, unable to ignore Thursday’s economic rebound and the recent strength in other energy commodities, climbed 14.5 cents during Friday’s regular session to close at $3.695, 2.6 cents higher than the previous week’s finish.

In spite of weather maps showing temperatures in the mid 80s or greater in the eastern two-thirds of the U.S. and the previous day’s rebound of 8.3 cents by July futures, cash prices fell at nearly all points Friday. Concerns about the growing storage surplus (and its down-the-road implications) along with the weekend loss of industrial load obviously commanded the most market influence.

Devon Energy Corp. will cut back on its natural gas drilling until prices begin to rebound, CEO Larry Nichols said last week.

Tuesday’s overall rebound in the cash market didn’t last very long as quotes fell at all points Wednesday. Besides the drag of a 12.9-cent futures decline a day earlier, Wednesday’s market was forced to acknowledge that already-light weather-based demand was tending to recede even further.

Devon Energy Corp. is cutting back on its natural gas drilling until prices begin to rebound, CEO Larry Nichols said Wednesday.

Natural gas and oil prices are unlikely to rebound over the next 12 to 18 months, but Royal Dutch Shell plans to forge ahead with some capital-intensive projects to prepare for the eventual upturn, CFO Peter Voser said last week.

Natural gas and oil prices are unlikely to rebound over the next 12 to 18 months, but Royal Dutch Shell plans to forge ahead with some capital-intensive projects to prepare for the eventual upturn, CFO Peter Voser said Wednesday.