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Proving that even a string of rampaging hurricanes can’t keep the oil and gas industry down, Central Gulf of Mexico Lease Sale No. 198 brought in more than $588.3 million in high bids out of more than $978.3 million in total bids. Activity marked a strong increase over last year’s sales in the central and eastern Gulf and is testament to industry optimism for the Gulf, even in light of currently low (relatively) natural gas prices.

El Paso Corp. narrowed its losses in the final quarter of 2005 on a string of asset sales, and despite lingering effects from last year’s devastating hurricanes in the Gulf of Mexico, the company’s core natural gas pipelines and exploration and production (E&P) groups posted solid earnings.

All points were on the same price page Tuesday, and that page was moving lower. A warming trend in the East, a continuing string of screen weakness (augmented by big dives in Nymex’s petroleum product contracts) and growing pressure to withdraw still-abundant storage gas (see TGT item in Transportation Notes) all contributed to the softness.

Following the lead of a crude futures market that was spooked by a string of events, September natural gas on Friday took back some of Thursday’s losses and jumped above $9 once again, but still managed to stay within the previous day’s trading range.

The rise in cash prices — prompted by widespread heat waves and a lengthy string of futures advances — continued Wednesday, but signs were surfacing that Wednesday likely represented the market’s peak this week and softness would be setting in Thursday.

Putting an end to the two-day string of higher natural gas futures settlements, the natural gas bears were having their way Thursday after the Energy Information Administration (EIA) reported that a healthy 108 Bcf was put into underground storage for the week ended July 9.

Breaking the five-day string of settling lower, the Nymex May natural gas futures contract on Tuesday fought its way to a gain of 4.4 cents. After falling to a low of $5.485 around noon eastern time, the prompt month spent the rest of the afternoon clawing its way back up to settle at $5.553.

Ending a five-session string of advances, the natural gas futures market turned lower Wednesday as traders lightened their long positions in sympathy with losses in the nearby crude oil pit and ahead of the release of fresh gas storage data Thursday. And while bears were undoubtedly awakened by April’s 19-cents sell-off and $5.375 settlement, the bulls fully expect nearby support to hold and provide the market with a springboard to higher levels.

Buoyed by another in a string of supportive storage reports (151 Bcf withdrawal), natural gas futures turned decisively higher Wednesday as pre-weekend short-covering met virtually no selling resistance.