Wall Street is running scared, and its concern over who is going to pay for the massive federal budget deficits extends to the energy industry.
Articles from Scared
While the development of Tropical Storm Katrina scared natural gas futures on Wednesday above $10 on concerns over Gulf of Mexico production, one weather forecasting company warned that the industry might be getting a little ahead of itself.
Scared off by the $6 psychological mark yet again, the natural gas futures prompt month tucked tail Friday as the June contract notched its second consecutive down day. After penetrating the $6 level in trading Wednesday, the June contract followed up its Thursday drop of 4.2 cents with a 6.2-cent loss on Friday to close at $5.862. The prompt month traded in the $5.850-5.970 range on light volume, with 48,826 contracts changing hands.
Wednesday’s last-day plunge in June futures had cash sellersrunning scared, sources said. However, basis differentials did notappear to be changing much if any, a Gulf Coast producer said, sobidweek deals done prior to Wednesday afternoon will tend to beanywhere from 6 to 10 cents above the current market. He was makingsales Wednesday at $2.00-02 for Henry Hub and $1.99-2.00 forColumbia Gulf-onshore.