Slipped

The overall cash market Wednesday on average slipped just over a penny, where large losses at Northeast locations were not quite offset by gains in the Midwest, mostly steady eastern quotes, and steady to slightly lower Texas next-day prices. At the close of futures trading November had managed a 3.3 cent advance to $3.470 and December had added 5.3 cents to $3.820. November crude oil gained 3 cents to $92.12/bbl.

The physical market slipped another 2 cents on average Thursday with Northeast points taking the larger hits. In Southern California forecasts of summer-like weather on top of planned maintenance were enough to skew traditional price differentials, and price declines were minimized.

The physical market slipped about a penny Thursday with quotes mostly about one or two cents on either side of unchanged. California points suffered a serious drubbing as a trio of factors combined to send points in the southern portion of the state reeling. Industrial users buying at index saw a market that did not look like it would turn around for several years and admitted any losses on the purchase of physical gas were made up by gains in the financial markets.

December natural gas slipped lower in light trading Friday as traders continue to see little threat of higher prices in the near term but also see a dearth of sellers at present prices. At the close January had fallen 6.4 cents to $3.584 and February had retreated 6.2 cents to $3.613. January crude oil added 76 cents to $100.96/bbl.

December natural gas futures slipped lower Thursday following the 10:30 a.m. EST release of Energy Information Administration (EIA) data showing an increase in natural gas inventories somewhat greater than what traders were looking for. However, the blip lower proved to be short-lived as the front-month contract rebounded higher before closing at $3.649, down just three-tenths of a penny from Wednesday’s regular session close.

The Marcellus Shale is not only the most economic natural gas basin in the country, it is producing better returns than many oil plays, an energy industry analyst told an audience in Philadelphia last week.

September natural gas slipped lower Monday in lackluster trading as natural gas failed to hitch its wagon to surging equity and oil prices and managed funds align on the short side of the market. At the close September had fallen 3.6 cents to $4.024 and October had eased 3.2 cents to $4.039. September crude oil jumped $2.50 to $87.88/bbl. and the Dow Jones Industrial Average gained 214 points to 11,483.

It’s well documented by now that due to low natural gas prices a number of producers and oilfield service companies have been switching drilling efforts and asset buildup from the primarily dry gas Haynesville to “wetter” [that is, richer in crude oil and natural gas liquids (NGL)] plays such as the Eagle Ford and Marcellus. But quite a few in the industry see Haynesville as remaining a strong shale resource and eventually strengthening. It may take a few years, but many expect gas prices to eventually begin making up for ground lost to the soaring crude market.

As broad financial reform legislation neared completion in the Senate, a bipartisan group of senators slipped in an amendment cutting off a move by the Commodity Futures Trading Commission (CFTC) to claim sole jurisdiction over natural gas and power transactions. The amendment passed by voice vote on the Senate floor Tuesday night, preserving the existing authority of individual states and FERC in the oversight of the natural gas and power markets.