Recovery

The new international natural gas trade year is off to a brisk start amid predictions that 2008 will mark the start of a price recovery and possibly a drilling revival for Canadian producers.

The new international natural gas trade year is off to a brisk start amid predictions that 2008 will mark the start of a price recovery and possibly a drilling revival for Canadian producers.

Prices soared by triple-digit amounts in the Rockies Thursday as the regional market continued a recovery from extreme weakness that featured low-end quotes of less than a dime in the previous two days. Most points elsewhere achieved moderate gains, but Thursday was likely to be the last day of this week’s overall market advances.

The domestic petroleum industry is in a sustainable recovery, but it remains challenged in regenerating its workforce at all levels and reestablishing itself as a world leader in research and development (R&D), the Interstate Oil and Gas Compact Commission (IOGCC) reported last week.

The domestic petroleum industry is in a sustainable recovery, but it remains challenged in regenerating its workforce at all levels and reestablishing itself as a world leader in research and development (R&D), the Interstate Oil and Gas Compact Commission (IOGCC) reported Monday.

With the approval of the Public Utilities Commission of Ohio (PUCO), Dominion East Ohio said Wednesday it is moving forward with the elimination of gas cost recovery (GCR) rates in favor of a pricing plan that sets consumer rates based on a more market-based methodology. As part of a pilot program — also known as Phase One of a two phase plan — approved by the PUCO in May, the new Standard Service Offer (SSO) natural gas rate is for customers who have not selected another supplier under Ohio’s Energy Choice program (see Daily GPI, May 31; Aug. 31).

Natural gas futures prices showed no signs of recovery Wednesday as the near-month contract tumbled 12.5 cents to end the day at $5.449 and the winter months again fell even harder than the prompt month, indicating steady selling pressure in light of high storage levels and diminishing hurricane concerns. The winter strip (November-March) fell 21.9 cents to $8.783.

Recovery from the Katrina-Rita one-two punch has progressed slowly and producers began to take a closer look at the impact on third-quarter earnings from lower production, facility repairs and downtime due to third-party infrastructure damage.

The slow recovery from Hurricanes Katrina and Rita in the Gulf Coast region and Gulf of Mexico continued Tuesday with total gas production shut-ins onshore and offshore finally dropping below 8 Bcf/d, according to a report from Golden, CO-based Bentek Energy. Bentek, which is tracking gas production nominations on the region’s major pipeline systems, said shuts-ins totaled about 7,766 MMcf/d on Tuesday, down from 8,003 MMcf/d on Monday and 8,208 MMcf/d on Sunday.