Seem

For gas producers, nothing fails like success, it would seem, as prices continue to founder on the strength of robust production out of unconventional plays. With normal weather, the industry will face record inventories at the end of next October, warned Barclays Capital analysts in a Wednesday note.

Forecasts of weekend low temperatures ranging from the 20s to 40s in Canada and most of the Lower 48 states would seem like a prescription for higher spot prices, right? But the cash market paid more heed Friday to the previous day’s 27-cent futures decline and the weekend drop of industrial load in falling at most points, bringing last week’s bull run to an end.

“Storm hype” just doesn’t seem to have the old price punch it used to. For the second week in a row the industry is seeing prices get substantially softer even as a hurricane heads into the Gulf of Mexico (GOM) production area. To be sure, the fact that the projected track of Hurricane Ike had been shifted more to the south — and thus farther from offshore infrastructure — was a major factor in prices dropping across the board Tuesday.

Environmental concerns seem to be trumping energy security needs when it comes to the issue of drilling in the waters off two pristine Northern California counties 100 miles up the coast from San Francisco, according to stakeholders on both sides of the issue.

Environmental concerns seem to be trumping energy security needs when it comes to the issue of drilling in the waters off two pristine Northern California counties 100 miles up the coast from San Francisco, according to stakeholders on both sides of the issue.

For a regional market that couldn’t seem to buy a price break all week, the Rockies came roaring back Friday with triple-digit spikes. That was in sharp contrast to falling prices at virtually all other points as above-normal temperatures were expected to be in place by the end of the weekend in nearly all of the U.S. except its northwest corner. The weekend retreat of industrial load was a minor bearish factor.

Incredible as it may seem, at least one Rockies trader was willing to let gas go for the weekend at a penny Friday. IntercontinentalExchange (ICE) reported that a 1-cent deal was among 84 trades done on its on-line system. Obviously very little changed hands at such a low level, as other Opal quotes on ICE ran as high as $1.31 and the point averaged about 95 cents Friday in NGI’s survey.

The weather fundamentals didn’t seem to be there, and the screen had extended a three-day slide with a drop of 35.6 cents the day before (adding a loss of another nickel Wednesday). But a mixed cash market showed a moderate bias to the upside Wednesday.

LNG boosters were ultimately disheartened at the end of 2005 when the United States couldn’t seem to pull in all of the liquefied natural gas (LNG) it wanted. In fact, last year saw a decline in LNG imports from 2004. However, U.S. markets can look forward to more supply security in the coming years, according to Edinburgh, UK-based Wood Mackenzie.