Rising

Despite rising profits due to higher oil and natural gas prices, Rapid City, SD-based Black Hills Corp. announced that net earnings for the quarter remained near flat due to an accounting charge. The company posted $14.1 million, or 52 cents per share for the qaurter, compared with earnings of $14 million, or 52 cents per share for the same quarter last year.

As NGI sources had suspected the day before, the cash market couldn’t keep rising indefinitely without visible means of support. Sure enough, eastern prices finally reacted Thursday to the one-two punch of weakening futures and only a modicum of weather-related demand by registering declines that were mostly in the vicinity of a dime but ranged from about a nickel to a little more than 20 cents.

While many gas market forecasters are betting gas prices will match the current Nymex strip for the rest of the year, which is higher than $5.70/MMBtu, consultants at Wood Mackenzie believe prices are poised to fall due to falling competitive fuel prices and resulting gas demand losses. The Wood Mackenzie consultants also are expecting a gas production recovery in the third quarter.

While many gas market forecasters are betting gas prices will match the current Nymex strip for the rest of the year, which is higher than $5.70/MMBtu, consultants at Wood Mackenzie believe prices are poised to fall due to falling competitive fuel prices and resulting gas demand losses. The Wood Mackenzie consultants also are expecting a gas production recovery in the third quarter.

NOVA restored its imbalance tolerance range to the normal +4/-4 Tuesday, a day after shifting it to 0/-4 to discourage rising linepack.

A week-long period of steadily rising prices at nearly all points, including a few spikes along the way, came to an end Tuesday. Prices tended to range from either side of flat at San Juan Basin and Pacific Northwest points to loosing 30-40 cents or so at Northeast citygates. Many points in the Gulf Coast and Midcontinent/Midwest fell between 20 and 30 cents, or approximately the same amounts by which they had risen the day before.

Prices were still moving higher in most cases Tuesday, but generally at a slower pace than on the day before. Markets as disparate as citygates in Florida and the Northeast, San Juan Basin and the Pacific Northwest/Western Canada were still seeing double-digit gains of up to about a quarter, with Algonquin citygates averaging a little more than $5. But a majority of points ranged from flat to up about a dime, with gains of a nickel or less prevalent.

The bull market in cash proved to have staying power Thursday, with further advances tending to outstrip those of the day before. Price movement varied widely and inconsistently from slightly higher at several Gulf Coast and Northeast points to as much as about 35 cents higher in the Rockies. A continuation of cold weather throughout the North and much of the West was credited with keeping prices firmer.

Strong natural gas drilling, driven by healthy oil and gas prices and rising cash flow in the first nine months of 2001, pushed up Canada’s industry average for finding and development (F&D) costs in the Western Canadian Sedimentary Basin by 46% last year, according to a new Ziff Energy Group study. However, through the first eight months of 2002, gas well completions are off 20% from a year ago.