Speculative

U.S. resource plays that are spewing out natural gas and oil have virtually cleared producer calendars of speculative drilling and made for an energy supply bounty that is becoming the envy of numerous companies around the world, speakers at a Houston energy conference said.

As the Commodities Futures Trading Commission (CFTC) examines the possibility of imposing speculative position limits on “all commodities of finite supply,” the $4.4 billion United States Natural Gas Fund (UNG) moved to reduce its holdings of natural gas futures contracts and indicated that it may not continue to pursue its plans to expand its fund.

Standard & Poor’s Ratings Services (S&P) is casting a wary eye on gas-weighted North American producers with low-speculative-grade ratings. Such firms could face downgrades if gas prices fall below $6.50/Mcf, S&P warned in a note last week, but it conceded that gas prices should see support from fundamentals.

Standard & Poor’s Ratings Services (S&P) is casting a wary eye on gas-weighted North American producers with low-speculative-grade ratings. Such firms could face downgrades if gas prices fall below $6.50/Mcf, S&P warned in a note Monday, but it conceded that gas prices should see support in the near term.

Addressing speculative rumors of large losses due to plummeting natural gas futures values, Houston-based energy hedge fund Trident Asset Management LP. said Friday that contrary to trader gossip, the fund has suffered “no major losses” and is doing fine, thank you very much.

Addressing speculative rumors of large losses due to plummeting natural gas futures values, Houston-based energy hedge fund Trident Asset Management LP. said Friday that contrary to trader gossip, the fund has suffered “no major losses” and is doing fine, thank you very much.

Fueled by a bullish petroleum inventory report mixed with continued buying euphoria from speculative fund accounts, November natural gas futures shot to a new 20-month prompt-contract high on Wednesday. As of 2 p.m. (EDT), the prompt month reached a high of $7.75, a 62.7-cent premium over Tuesday’s settle and 31 cents above the high reached on Oct. 7. It settled at $7.623, up 50 cents.

Weighing progress toward completion of the Enron Bankruptcy case, Moody’s Investors Service assigned a speculative grade B1 senior secured rating to Transwestern Pipeline Co.’s $400 million term loan, a B1 senior implied rating, subject to review of final documentation, and said the outlook is positive.

Dynegy Inc.’s speculative grade liquidity rating was raised a notch this week by Moody’s Investors Service, which noted that the company has “substantial” liquidity back up, but possibly weaker operating cash flow for the next 12-24 months.