Steep

Lower gas and oil production in North America offset gains made overseas by Unocal in the third quarter. The company reported that earnings (excluding special items) from continuing operations fell slightly during the third quarter to $126 million, or 52 cents/diluted share, compared with the Thompson/First Call consensus of 54 cents/share and 3Q2001 earnings of $127 million, or 52 cents/share.

Overall prices tended to soften again Thursday, but the declines were considerably smaller than those on Wednesday in most cases. Except for a maintenance-related implosion in the Rockies market and a hefty drop on still-most-expensive Columbia-Appalachia (TCO), the great majority of points ranged from flat to less than a dime lower, and a couple saw moderate gains.

The steep gas production declines that occurred in the first quarter apparently did not continue in the second quarter, according to a preliminary survey of producer forecasts by Lehman Brothers. The survey of 45 producers indicates that production in the Lower 48 states will be roughly flat with first quarter levels, said Lehman analyst Thomas Driscoll, who believes producers have been quicker to respond to price signals since the sharp price spikes in 2000.

Thanks to the one-two punch of a much-below-expectations storage injection report and somewhat premature winter weather that was producing near-blizzard conditions in parts of the Upper Plains and Upper Midwest, spot prices spiked intensely Thursday for gains in excess of 40 cents nearly across the board.

Pacific Gas & Electric finally brings an extended Stage 3 high-inventory OFO to a halt today. The OFO, which caused steep plunges at PG&E-related pricing points Friday when it was issued for Saturday, got extended through Sunday at zero tolerance for positive daily imbalances. The tolerance was loosened considerably to 15% in Monday’s OFO, but $5/Dth penalties remained in place.

Despite its steep rise in price over the past year, the AmericanGas Association said last week that natural gas still will costless to use this year than any other major home energy source,based on information from the U.S. Department of Energy’s Office ofEnergy Efficiency and Renewable Energy. Nearly 61% of U.S. homes,about 58 million, have natural gas service.

Despite its steep rise in price over the past year, the AmericanGas Association said last week that natural gas still will costless to use this year than any other major home energy source,based on information from the U.S. Department of Energy’s Office ofEnergy Efficiency and Renewable Energy. Nearly 61% of U.S. homes,about 58 million, have natural gas service.

Despite its steep rise in price over the past year, the AmericanGas Association said last week that natural gas still will costless to use this year than any other major home energy source,based on information from the U.S. Department of Energy’s Office ofEnergy Efficiency and Renewable Energy. Nearly 61% of U.S. homes,about 58 million, have natural gas service.

Nearly all of Thursday’s cash market experienced the steep pricedeclines that had been anticipated after the screen reactedbearishly to AGA’s Wednesday afternoon storage report.