Spot

News This Week :

Cabot Oil & Gas Corp. announced Tuesday that its gross production in the Marcellus Shale has averaged more than 700 MMcf/d for the last two weeks, hitting a record 752 MMcf for one 24-hour period.

The physical market gained on average more than 9 cents Monday with strength noted across the board, and not to be outdone spot futures posted the highest settlement since mid-December. Buyers winding up business for bidweek were not happy with recent market strength, but pointed to longer term forecasts showing what they believed would be cooler temperatures in September and October.

Talisman Energy Inc. is slashing dry gas spending again in response to chronically low prices, but the company continues to ramp up production from the liquids-rich shale plays in its portfolio.

Spot natural gas made it three straight days of advances Wednesday as attractive storage differentials at some Western points, along with cooler weather, prompted buying in most regions of the country. A handful of Northeast locations were the exception as the posted double-digit drops, mostly between a dime and 30 cents. At the close of futures trading May had fallen 4.6 cents to $2.141 and June had skidded 5.1 cents to $2.267. May crude oil tumbled $2.54 to $101.47/bbl.

Strange creature, this spot gas market. Prices rise for two days when generally mild weather doesn’t appear to justify it; then when heating load-boosting cold either begins to show up or is in the next-day forecasts, the climb falters Wednesday and all trading locations but one drop. Only two of the declines were by less than double-digit amounts.

Generally moderate weather predictions, such as the Chicago area reaching the low to mid 50s Tuesday, didn’t suggest any likelihood of spot prices increasing Monday. But cash traders either thought otherwise or were looking ahead to near the end of the week, when cold fronts would be moving into such areas as the Midwest.

Paraphrasing a Christmas carol, “It’s beginning to look a lot like last week” when it comes to the spot gas market. Just as the Nov. 28-Dec. 2 trading week featured three days of mostly rising prices followed by two days of majority softness, the current week’s market was generally strong through Wednesday before falling at most locations Thursday.

The approach of colder temperatures that would take Friday lows into the 30s in the Northeast kept spot prices rising in that region Thursday. But most other areas succumbed to predictions of weekend warming trends and the previous day’s 9.3-cent futures drop in recording lower quotes.