Standstill

With congressional budget talks at an apparent standstill and a government shutdown looming at press time Friday, the Commodity Futures Trading Commission (CFTC) and other federal agencies were preparing to operate in an essential operations-only scenario, while the Federal Energy Regulatory Commission said it would conduct business as usual — at least temporarily.

With congressional budget talks at an apparent standstill and a government shutdown looming, FERC and other federal agencies are preparing to operate in an essential operations-only scenario.

In terms of volatility, the cash market came to a near-standstill Wednesday as gains and losses were approximately even and only a few locations ventured more than a nickel in either direction.

A high-ranking Halliburton executive Tuesday said he doesn’t believe drilling in the offshore — both in shallow water and deepwater — can remain at a standstill for long as a result of the Deepwater Horizon rig explosion and oil spill in the Gulf of Mexico (GOM).

The softening trend of cash prices appeared to have slowed to a near-standstill Tuesday as most losses were in single digits that day and were nearly offset by flat to higher locations. However, larger drops extended to a majority of points on the following day, and the downhill momentum got even steeper Thursday as mostly large declines (all in double digits) swept through the entire market.

The Senate and House were at a standstill at the end of the week in their efforts to reach a compromise on legislation to open up more of the Outer Continental Shelf (OCS) to oil and natural gas leasing, according to Capitol Hill aides.

This week’s upward march in prices didn’t end Wednesday but did come to a near-standstill. Only Rockies gains of 8-15 cents or so stood out from the vast majority of points that ranged from flat to up about a nickel. Most of those rose less than a nickel, and small declines at about half a dozen scattered points figured into the mix.

Monday’s huge surge of cash bullishness came to a near-standstill Tuesday, and several NGI sources indicated they expect a gradual price slide to begin Wednesday. Other than moderate increases in the Northeast, Rockies/Pacific Northwest and California and stronger gains in Western Canada, most points were flat to less than a nickel higher Tuesday (a few scattered small declines also were part of the mix).

Despite fundamental support having virtually disappeared, most of the cash market outside the Rockies managed to hang tough for at least one more day of firmness Tuesday, but new price advances slowed almost to a crawl. Non-Rockies quotes tended to range from flat to no more than about a nickel higher, with most points averaging gains of 3 cents or less.