Spiral

December natural gas continued its downward spiral Friday as near-term weather appears likely to encourage greater storage additions and technical support has yet to be fully realized. At the close December had fallen 9.4 cents to $3.316 and January had eroded 5.0 cents to $3.496. December crude oil shed $1.41 to $97.41/bbl.

May natural gas futures continued on their downward spiral Thursday following the release of government inventory data that showed a withdrawal far less than what the industry was expecting.

Natural gas prices, production and demand are expected to continue on a downward spiral through the rest of the year and possibly pick up in 2010 if the economy recovers, the Energy Information Administration (EIA) said in its Short-Term Energy and Summer Fuels Outlook last Tuesday.

Natural gas prices, production and demand are expected to continue on a downward spiral through the rest of the year and possibly pick up in 2010 if the economy recovers, the Energy Information Administration (EIA) said in its Short-Term Energy and Summer Fuels Outlook Tuesday.

British Petroleum and Amoco Corp. have found a way to avoid therecent downward spiral of energy stock prices while boosting theirreserves and production during a tough time in the oil patch. Thetwo companies announced one of the largest ever industrial mergersyesterday, creating North America’s biggest oil and gas producerand the third largest petroleum company in the world behind RoyalDutch Shell and Exxon. The deal is expected to be complete by yearsend.

Tired of watching natural gas futures spiral lower over the last couple of weeks without much respite, traders pushed the November contract higher Friday in what market watchers were calling a short-covering rally. After putting in a high of $5.735, the prompt month closed out the week at $5.620, up 22.8 cents on the day but 26.1 cents lower for the week.

With natural gas futures prices continuing their downward spiral, the New York Mercantile Exchange Inc. (Nymex) said Thursday that some of the margins on natural gas futures, Henry Hub swap futures, Henry Hub penultimate swap futures, Nymex miNY natural gas futures, and Henry Hub swing swap futures contracts will decrease at the close of business Friday.

The downward trend in producers’ earnings continues this week, with newly merged major ChevronTexaco Corp. especially hard hit — not only by lower commodity prices, but also special charges and merger-related costs that brought fourth quarter earnings down about $3.5 billion. However, Marathon Oil Co. and Unocal Corp., which also reported quarterly and year-end earnings on Tuesday, also saw their fortunes fall on dismal commodity prices and other charges toward the end of 2001.

Last week, Enron Corp. saw things go from bad to worse, with its stock price continuing to plummet, a formal probe launched by the U.S. Securities and Exchange Commission, downgrades by credit ratings agencies and energy analysts, and finally, a letter to the board from one of its largest shareholder groups urging the energy trader to begin making reforms in its practices to restore some investor confidence.