Buoyed by a much firmer screen and the pickup in load thatfollows a long Labor Day weekend, cash prices rose Tuesday by anickel or more at almost every point, with most of the increasesexceeding a dime. Not only did natural gas futures rise more than adime, but the crude oil futures contract for October also flexedits muscle with a jump of slightly over 60 cents, placing it wellabove $22/bbl, a marketer pointed out.
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Futures Up on Technical and Fundamental Considerations
Buoyed by strong demand for physical supplies and aggressivebuying under last week’s price chart gap, the natural gas futuresmarket continued to whittle away at last week’s collapse. Theremaining three months of the millennium received almost equalbuying interest Tuesday, with October, November and Decemberadvancing 11.6, 11.9, and 11.6 cents respectively. Estimated volumewas hefty, with 81,210 contracts changing hands.
Cash Keeps Tumbling Despite Screen Rebound
October futures managed to achieve a moderately strong recoveryFriday but apparently there was too much negative baggage left overfrom Thursday’s quarter-plus plunge to support cash. Physical gasprices continued their downhill slide, buffeted by the combinationof weak holiday weekend demand and mild weather virtuallyeverywhere. “Cash just didn’t stand a chance today,” a marketersaid.
Mitchell Increases Spending After Banner Quarter
Invigorated by a strong second quarter, Texas-based MitchellEnergy said last week it is increasing its capital budget by $31million to total $167 million. Most of the increases will bededicated to escalating the company’s drilling program. With thisstepped-up activity, gas production is expected to reach the 250MMcf/d range by the end of the year. Mitchell said production atthat level would equal its January output, before gas prices felldramatically.
Mitchell Increases Spending After Banner Quarter
Invigorated by a strong second quarter, Texas-based MitchellEnergy said yesterday it is increasing its capital budget by $31million to total $167 million. Most of the increases will bededicated to escalating the company’s drilling program. With thisstepped-up activity, gas production is expected to reach the 250MMcf/d range by the end of the year. Mitchell said production atthat level would equal the company’s output it had in January,before gas prices fell dramatically.
Futures Post New High on Strong Fundamentals
Supportive physical prices and concerns over supply tightnesstook center stage yesterday in the natural gas pit at Nymex andthat gave bulls the impetus to post the seventh straight priceadvance. The September contract finished up 2.7 cents at $2.748after notching both a higher high and a higher low for the session.Estimated volume was 77,940 contracts.
Duke a Big Player in Latin American Generation
Aiming to be “as strong a company in Latin America as it is inNorth America,” Duke Energy International agreed to exchange $405million for Dominion Resources’ portfolio of hydroelectric, naturalgas and diesel power generation businesses – totaling 1,200 MWgross capacity – in Argentina, Belize, Bolivia and Peru. In thelast week Duke Energy International has pledged to purchase 3,800MW of generation capacity in Latin America in three separatetransactions for about $1.285 billion.
Anadarko in Gulf With Texaco, Has Strong 2Q
Anadarko Petroleum Corp. is gaining Gulf of Mexico sub-saltexploration rights through an agreement with Texaco Exploration andProduction Inc. Anadarko also just announced significantly improvedsecond quarter results and a nearly 60% boost to its currentcapital spending program.
Post-Holiday Prices Up, But Softening Expected Today
The cash market emerged from the July 4 holiday weekend with astrong performance in which prices ranged from flat at some pointsin the Gulf Coast and Midcontinent to nearly 20 cents higher inCalifornia. The West made a remarkable recovery from last Friday’ssteep dives, reclaiming nearly all of the ground it had lost. Aheat wave over the eastern third of the U.S.-especially acute inthe Northeast-kept prices firm in the producing and market areas.
Futures Mark a Lazy Summer Friday
Lacking strong leadership for the fourth day in a row thenatural gas futures market continued to limp lazily sidewaysFriday. But unlike the modest gains that were posted Tuesday,Wednesday and Thursday, prices drifted lower to close out the week,possibly setting the market up for more losses today. The Julycontract finished 3.7-cents lower at $2.258.