Reeling

Still reeling from Thursday’s report of a surprise 3 Bcf injection into natural gas storage for the week ended March 20, the expiring April gas futures contract plunged lower Friday as market participants were forced to decide whether they wanted to “make or take” delivery.

Even with IDACORP’s energy marketing unit reeling from lower volatility and reduced pricing spreads out West, an executive with the company last Tuesday said the company is not ready to pull the plug on its trading operations, noting that the company has carved out a “unique position” in the Western power markets.

Still reeling from the Bush administration’s decision last week to cut back on the eastern Gulf of Mexico acreage to be included in the upcoming Lease Sale 181, the National Ocean Industries Association (NOIA) says it’s now concerned that “even this vastly smaller Sale 181 region…is in grave danger of being placed off limits to development.”

Still reeling from a “devastating” weather picture the naturalgas futures market gapped lower on the open yesterday and continuedlower as traders added to short positions. By slipping 7.3 cents to$2.451 the December contract came perilously close to breakingthrough the lowest level of any spot contract since summer lowswere put in. The January contract, meanwhile, fared even worse,dropping 8.5 cents to finish at $2.596.

There’s no doubt about it, times are tough in the midstream gasbusiness. Depressed NGL prices and unfavorable margins have kept atleast one player from selling its assets while the same factorscaused another to seriously rethink the wisdom of a recentpurchase. Executives and analysts predict a lot more horse tradingof properties as companies look to rationalize assets and buildpositions for better times (hopefully) ahead.