Ride

After trading in positive territory for most of the session, the natural gas futures market dropped lower in the final hour of open-outcry trading Monday on selling ahead of Thursday’s storage report. The October contract was the hardest hit, tumbling 11 cents to finish at $4.661.

Anadarko Petroleum Corp., which has taken a roller-coaster ride this year following the surprise resignation of its CEO in March and two announced cuts to its production forecasts, on Tuesday revealed it will shut down an undisclosed number of onshore U.S. drilling rigs to remain within budget. Several rumors Tuesday remained unsubstantiated, but at least one analyst suggested in a research note that the huge independent may be for sale.

Spot prices were flat to a few cents higher at most points across the continent on Friday generally in response to the continuing rise in Nymex futures prices, but transportation-related constraints also played a role. The cash market managed to add 30-40 cents for the week at most points compared to the previous Friday, while near-month futures set the tone with a solid 55-cent gain Friday to Friday.

Speculative energy trading is history for American Electric Power (AEP), which said Thursday that the company will instead focus on asset-based energy trading and marketing geographically — wherever it has facilities — becoming more conservative, more cost efficient, more cash-wise and less growth oriented.

What a difference a week can make. Just seven days after spiking to new 17-month highs, the natural gas futures market fell back down to match recent lows Thursday following news that a greater-than-expected 33 Bcf was injected into storage last week. The November contract closed at $4.133, down 12.7 cents for the session.

Prices continued to ride the crest of somewhat premature winter weather and strong futures to new gains Wednesday, but just barely in most cases. Rockies numbers increased by about 20-40 cents and Northeast citygates rose by 5-15 cents, but otherwise nearly all points ranged from flat to only about a nickel higher.

Spot prices for natural gas were up 10-20 cents Tuesday in response to higher Nymex futures prices and a little bit of heating demand in Northern market areas. Warmer temperatures in the desert Southwest and maintenance on El Paso contributed to price increases in that region, while a rupture on TransCanada’s Peace River mainline in remote northwestern Alberta forced the shut-in of about 200 MMcf/d.

Aquila Inc. shareholders went on a roller coaster ride last week as ILA share prices plummeted $8, or 36%, from the $22.25 close on April 26 to last Tuesday’s low of $14.26 and then rebounded back above $17 on waves of bad and then good news. Moody’s Investor Service posted an outlook negative on the company’s credit April 26, putting Aquila in danger of falling below investment grade. After reaffirming its commitment to maintain an investment grade credit rating, Aquila announced it would buy Cogentrix Energy Inc., a large independent power producer with 3,496 MW of diverse power generation assets, for $1.5 billion, including debt assumption. The purchase, which was viewed favorably by Wall Street, overshadowed a negative earnings report the company released the following day.

Following the roller-coaster ride that crude oil prices have been experiencing over the past few weeks, Salomon Smith Barney’s Robert Morris said that crude prices continue to be the “fulcrum” for exploration and production company stock performance. The analyst pointed out that E&P shares extended their retreat two weeks ago as both crude oil and natural gas prices dropped sharply.