Slide

Natural gas drilling activity continued its downward slide during the first quarter, while oil well completions rose during the period, according to the American Petroleum Institute’s (API) quarterly well completion report issued this week.

Physical gas prices continued to slide Thursday at nearly all points, likely helped lower by the screen’s milestone Wednesday of dropping below $2. Moderating weather in the Northeast Thursday pulled the plug on any price gains prior to the release of inventory data, and western locations weakened as well.

The cash market continued to slide lower Thursday with prices mostly dropping less than a nickel, except in the northeast, which recorded a handful of double-digit drops. Midwest points were only modestly lower, while a few spots in the Rockies and in California managed to tally gains.

All cash points retreated Tuesday with most sliding in double-digits as the physical market caught up with Monday’s late-session slide in futures and adjusted for continued weather moderation for much of March.

Abundant natural gas, including shale, is playing a significant role in continuing the three-year slide in electric power prices and the downbeat outlook for independent power producers, say analysts.

Nearly all of the cash market remained in a downhill slide Monday as mild to cool weather dominated the overall outlook, and cold conditions returning in a couple of regions proved unable to generate enough heating load at their associated pricing points. The restoration of industrial demand from its normal weekend hiatus had essentially no bullish impact.

Even before the 2008 nationwide economic recession, natural gas sales in Oregon had begun a slide that continued for at least two years, according to energy statistics for 2010 that were released Friday by the state’s Public Utility Commission (PUC).

NGI’s Unconventional Rig Count edged up ever so slightly for the week ending July 22, rising to 987 rigs from 984 the previous week. Despite the pedestrian weekly advance, the current unconventional rig count remains a full 3% higher than the 961 rigs that were at work one month ago.

May natural gas futures continued their slide as traders reported no interest by commercial players and seemed resigned to the ongoing slump. Expectations are for a withdrawal in Thursday’s inventory report, but that is seen as little help to the bullish cause. At the end of the day May had retreated another 8.5 cents to $4.146 and June had given up 8.4 cents to $4.220. May crude oil continued its run higher, adding 49 cents to $108.83/bbl.