Slips

Canadian pipeline giant TransCanada Corp. reported a 1-cent/share drop in net income from continuing operations for the third quarter to 40 cents/share compared to the same period last year but income for the first nine months of the year was up 30% to $1.64/share.

After starting out the session at a new high of $6.76, the June natural gas futures contract, one day before expiry, slid to the $6.55 level in mid-day trading before closing at $6.684, down 2.1 cents on the day.

Marathon Oil Corp.’s first quarter profit fell 16% from a year ago after property sales cut into oil and gas production, but the company still surpassed analysts’ forecasts by two cents.

Deflated by the news that Hurricane Isabel would miss the Gulf of Mexico, the natural gas futures market sunk to new 10-day lows Monday morning as traders added to their already significant short holdings. However, after an initial flurry, selling failed to punch prices below support at $4.60, and the market shifted into a sideways-to-higher trading channel for the remainder of the session. October futures finished at $4.685, down 8.1 cents for the session, but in the upper half of its $4.62-725 trading band. At 50,461, estimated volume was light.

EIA’s report of a 93 Bcf weekly gas storage injection was in line with expectations, but futures traders apparently looked ahead to next week’s storage report which could feature a much lower number because of the Gulf production shut ins this week. Futures went off the board at $5.050, and eastern cash prices fell only about 3-8 cents on average. Western cash, however, once again showed strength, posting mainly nickel gains.

With commercial traders reticent to make a move before the weekend and many local speculators leaving the trading pit early for their annual trip to the Kentucky Derby, natural gas futures moved quietly lower Friday to cap off a negative week of trading activity. With its $5.255 close, the June contract finished 1.2 cents lower for the session and down almost 30 cents for the week.

Volatility has dwindled in the gas futures market, and traders struggled to find direction Wednesday without much success. The April contract was weak in the morning, strong midday with a daily high of $5.45 just before noon and then weak again in the afternoon ending the day down 6.1 cents at $5.278.

After more than a $1 drop Monday and Tuesday, downward momentum in gas futures finally dissipated on Wednesday. In the morning it even appeared that the April contract was going to hold above $6, but bulls’ hopes were quickly dashed and the near-month contract ended the day down another 7.9 cents to $5.865, a far cry from the $8.50 high only eight trading days ago. The high for the day Wednesday was $6.115 but the low was $5.760.

Citing the uncertainty looming over the high-profile complaint case against El Paso Corp. at FERC, Moody’s Investors Service cut the senior unsecured debt ratings of the Houston-based energy corporation and its subsidiaries to junk status, or Ba2 from Baa3 last Tuesday, and also assigned a senior implied rating to El Paso of Ba1. It put the ratings outlook for embattled El Paso at negative.