Soaring

Soaring natural gas prices, continued firm oil prices and stable drilling costs, have prompted analysts at Raymond James & Associates to raise their price targets on 22 exploration and production companies.

Thursday’s explosion of prices in which gains ranged from about 30 cents to 90 cents (Algonquin citygate) left quite a few traders befuddled and groping for an explanation. Several were able to offer suggestions about potential contributing factors, but added that they didn’t believe their suggestion alone rationalized the big gains. “Beats me” was the essence of most answers.

As a result of last week’s soaring natural gas prices, continued firm oil prices and stable drilling costs, Raymond James & Associates said it is raising its price targets on 22 exploration and production companies that it has labeled Strong Buy and Outperform.

Cash prices rode the Nymex higher again on Friday with the help of continued colder temperatures across most of the Midwest and East and little change in the forecast for most of the country. Nymex soared 60 cents to $7.22 and many cash points were up 10-20 cents.

A plea by large chemical maker, Huntsman LLC for Congress to investigate soaring natural gas prices, led by an express train futures market, apparently has been heard in Washington. Senate Judiciary Committee Chairman Orrin Hatch (R-UT) said Friday he will hold hearings when Congress returns next year. The move was seconded by Sen. Harry Reed (D-NV), assistant minority leader. The prompt month futures contract closed up 60 cents Friday at $7.22/MMBtu and reached a high of $7.55 during the week.

Soaring natural gas prices, which have been led by the futures market recently, are inexplicable given full storage, high drilling rig counts and relatively moderate weather, chemical maker Huntsman LLC said Wednesday in calling on Congress to investigate NYMEX gas futures trading with an eye to overhauling the nation’s natural gas pricing structure.

After soaring 19 cents Thursday to a high of $4.930 immediately after the Energy Information Administration (EIA) reported a 32 Bcf weekly storage withdrawal, which was larger than expected and larger than the five-year average, December gas futures made a sharp reversal, plummeting all the way down to $4.55 by about 1:25 p.m. EST. The December contract ended the day down 12 cents to $4.618.

Pushed by a new spread of cold weather that limited highs above 70 to the Southeast and promised to engulf much of that region the following day, the market recorded strong upticks across the board Wednesday. Tuesday’s screen gain of nearly 16 cents also lent some delayed support to cash prices.

Soaring oil and gas sales pushed two of North America’s largest independents, Devon Energy Corp. and EnCana Corp., to record first quarter earnings. Devon’s net earnings were $436 million ($2.76 a share), compared with $62 million (41 cents) a year ago. Meanwhile, Calgary-based EnCana earned C$1.246 billion (C$2.57), versus C$163 million (34 cents) for the same period of 2002.