Recession

Natural gas futures joined the rest of the energy complex’s slump on Tuesday over renewed U.S. economy recession fears and moderating temperatures. February natural gas shed 32.3 cents on Tuesday to close at $7.670.

Kerr-McGee Corp., joining the trend among independents as the recession and lower energy prices take their toll, has reduced its capital spending budget for 2002 to $890 million — down from its $1.24 billion spending last year. Most of this year’s capital spending, approximately $780 million, will be spent on oil and gas exploration and production. The Oklahoma City-based company spent $1.03 billion on E&P in 2001.

Kerr-McGee Corp., joining the trend among independents as the recession and lower energy prices take their toll, has reduced its capital spending budget for 2002 to $890 million — down from its $1.24 billion spending last year. Most of this year’s capital spending, approximately $780 million, will be spent on oil and gas exploration and production. The Oklahoma City-based company spent $1.03 billion on E&P in 2001.

Kinder Morgan, Inc. may not be recession-proof, but its fee-based portfolio of midstream assets clearly felt no ill effects during the third quarter, according to CEO Richard Kinder. The company produced a 109% increase in third quarter net income to $58.2 million, or $0.48 per diluted common share, exceeding Wall Street consensus estimates by 2 cents/share. The results compared to $26.7 million, or $0.23 per diluted common share, in the third quarter of 2000.

Kinder Morgan, Inc. may not be recession-proof, but its fee-based portfolio of midstream assets clearly felt no ill effects during the third quarter, according to CEO Richard Kinder. The company produced a 109% increase in third quarter net income to $58.2 million, or $0.48 per diluted common share, exceeding Wall Street consensus estimates by 2 cents/share. The results compared to $26.7 million, or $0.23 per diluted common share, in the third quarter of 2000.

Due to a confluence of events, including ample natural gas storage supplies and the nation entering a recession, Ronald Barone of UBS Warburg said it should “come as no surprise” that the company has decided to lower its 2001 and 2002 natural gas spot price forecast. The analyst said he has lowered the 2001 projection of 12-region composite spot price to $3.80 from $4.10, compared to the current Street consensus of $4.00. UBS Warburg’s Henry Hub equivalent is $3.95.

Due to a confluence of events, including ample natural gas storage supplies and the nation entering a recession, Ronald Barone of UBS Warburg said it should “come as no surprise” that the company has decided to lower its 2001 and 2002 natural gas spot price forecast. The analyst said he has lowered the 2001 projection of 12-region composite spot price to $3.80 from $4.10, compared to the current Street consensus of $4.00. UBS Warburg’s Henry Hub equivalent is $3.95.

Amid deepening fears that the U.S. economy is headed for a recession, and exacerbated by light trading volume following a bomb threat at Nymex, natural gas futures tumbled to new 19-month lows Tuesday, as institutional traders increased their short exposure. Almost uniform selling was seen across the entire strip of contracts, pressuring the winter strip down 15 cents to $2.99 and the 12-month strip down 13 cents to $2.97. The October contract closed at $2.225, down 14.4 cents for the session.