Robust

Increasing global demand for energy and high prices have created a robust environment for oil and gas producers, but high prices have also driven up the cost of raw materials and impacted refining margins in the downstream sector, Ernst & Young said in a new report.

Increasing global demand for energy and high prices have created a robust environment for oil and gas producers, but high prices have also driven up the cost of raw materials and impacted refining margins in the downstream sector, according to Ernst & Young.

Higher oil and natural gas prices have resulted in robust revenue for exploration and production (E&P) companies, but the accompanying surge in service costs has dampened the financial windfall — and an $8/Mcf gas price may be required to deliver a market return on capital going forward, according to energy analysts.

Higher oil and natural gas prices have resulted in robust revenue for exploration and production (E&P) companies, but the accompanying surge in service costs has dampened the financial windfall — and an $8/Mcf gas price may be required to deliver a market return on capital going forward, according to energy analysts.

Cash prices again defied robust prior-day futures support along with cold weather forecasts in Canada and across most of the northern half of the U.S. in plummeting at all points Friday. The pervading softness was linked to early-season storage withdrawals, fairly moderate weather in the southern U.S. and the decline of industrial demand that occurs during a weekend.

Prices continued to advance at a solid majority of points Tuesday, but the gains were considerably less robust than Monday’s, suggesting that this week’s heat-inspired rally may be starting to lose steam. Mixed price movement remained in play as a few scattered points saw flat quotes or modest declines.

Robust production in Oklahoma and North Texas has spawned another project to move gas eastward to markets in Florida and the Northeast, and this one’s a big one.

Robust commodity prices and a strong market for oil and gas properties are nudging industry small fry to the energy patch deal table, too. Houston-based Plains Exploration & Production Co. (PXP) said it is pursuing the divestiture of nonstrategic oil and gas properties, mainly in California and Texas, the company said. Separately, Midland, TX-based independent Saber Resources LLC hired Energy Spectrum Advisors Inc. (ESA) to divest all of its oil and gas interests in the Permian Basin, which are about 90% oil producing.

Duke Energy Gas Transmission (DEGT) said Thursday that a “robust and diverse response” to its recently completed Lebanon East open season has confirmed that additional capacity is necessary to better serve Ohio and Pennsylvania markets. During the open season, shippers expressed interest in more than 1.2 Bcf/d through nonbinding firm transportation agreements. The solicitation ran from Dec. 1, 2005 to March 1, 2006.