Slowly

As the curtain slowly falls on gas supply from the Gulf ofMexico Continental Shelf, the deep-water waits in the wings.Canadian producers are scripting their role on the U.S stage. Andthe Alaskan gas play’s Lower 48 audience can’t buy tickets to theshow for about a decade.

Unocal Corp. said it expects worldwide average net oil and gasproduction to rise 44% to nearly 700,000 Boe/d by 2004. The updatedoutlook reflects a 7.6% annual growth in net worldwide productionfrom an estimated 485,000 Boe/d in 1999. Net Lower 48 U.S.production is expected to rise 44% to an estimated 237,000 Boe/d in2004.

In the wake of last year’s oil bust, energy industry lenders arestill keeping a tighter grip on their money. However indicationsare some banks and investors are starting again to look for placesto put capital in the energy patch.

Slowly but surely the faux summer that much of the eastern U.S.has experienced recently is turning into “real summer,” a marketernoted. But even that and a moderate gain by the August Henry Hubfutures contract were not enough to avert softening at most cashtrading points Thursday. Eastern declines tended to be minuscule,with a few points staying flat and few others falling by more than1-2 cents. But an easing of Southwest supply constraints andgenerally cooler weather in the West caused larger price drops inthe West, topped by a loss of several cents in the San Juan Basin.

In the wake of last year’s oil bust, energy industry lenders arestill keeping a tighter grip on their money. However indicationsare banks and others are looking for places to put capital in theenergy patch.

After halting a three-day, 25-cent price slide Tuesday, naturalgas futures slowly began to build yesterday what bulls would liketo think is a base on which further gains will be added. Andalthough it is far from universal, that sentiment was echoed byothers who think that the confluence of relatively strong cashprices and rallying crude oil prices are supportive factors fornatural gas. The April contract finished 3.1 cents higher at $1.748in light trading.

The May Nymex contract continued to slowly rebound from itsmassive price downturn on Monday by closing Wednesday up another2.0 cents at $2.521. Trading was held to an extremely tight range,as the spot month could only post a high of $2.555. Total volumewas estimated at 255,671 contracts.

NIPSCO announced 3,281 out of 50,000 eligible residentialcustomers in the South Bend-Mishawaka-Granger area and 920 out of1,500 eligible commercial and small industrial buyers in thenorthern third of the state of Indiana will begin receiving gasfrom alternative suppliers for the first time starting in April.