Rising

It’s an old saying: What goes up must come down. That was true in spades in the cash gas market Thursday as sharply rising prices over the previous two days suddenly reversed into major plunges at virtually all points. The below-normal temperatures expected by the weekend in most of North America, which had apparently been instrumental in driving the market higher during the first half of the week, lost their bullish influence after a four-day string of futures increases ended Wednesday with a dive of 16.4 cents.

Chesapeake Energy Corp. CEO Aubrey McClendon continues to put his money where the shale is, most recently by adding another 500,000 net acres to the company’s million-plus acre leasehold in the Marcellus Shale.

In the midst of rising complaints from local government officials about the level of its information sharing in the wake of the Sept. 9 San Bruno, CA, transmission pipeline explosion, Pacific Gas and Electric Co. (PG&E) last week announced it was making additional information accessible to customers via the Internet. In the southern half of the state, Sempra Energy’s two gas utilities are taking similar steps.

It has been conventional wisdom that with gas rig counts beginning a slow decline recently, production is still rising overall because it is mostly rigs being deactivated in conventional plays rather than those involved in the more prolific shale gas search. However, some market watchers are not buying that argument.

Rising prices grew even more prominent in the market Wednesday as enough regions are starting to feel enough early-autumn chill to prompt noticeable heating load. It isn’t much yet, as overnight lows in the 40s and 50s remain the most common temperature depths, but abetted by a prior-day gain of 1.6 cents by November futures it was sufficient to drive most points higher by generally small amounts.

In the midst of rising complaints from local government officials about the level of its information sharing in the wake of the Sept. 9 San Bruno transmission pipeline explosion, Pacific Gas and Electric Co. (PG&E) Monday announced it was making additional information accessible to customers via the Internet. In the southern half of the state, Sempra Energy’s two gas utilities are taking similar steps.

The cash market had plenty of help in achieving increases at most locations Wednesday. There was the previous day’s rally by August futures, rising temperatures in several regions boosting power generation demand, and the lingering potential for a tropical storm approaching the offshore production area by early next week.

The spot market continued to rely on significant heat levels for early June and prior-day futures strength in rising at all points for a second straight day Friday. Thursday’s report of a slightly below-expectations storage injection, which came out too late to impact most of that day’s cash trading, was an extra impetus for the price gains despite the typically lower industrial load during a weekend period.

Natural gas and oil industry fundamentals are improving “in stride” with the global economy, and with rising economic expectations, energy market sentiment remains “relatively positive,” industry consultant Ernst & Young LLP reported last week.