Supposed

He insists he’s not supposed to be a cheerleader for the oil and gas industry he regulates, but when Scott Perry, deputy secretary of the Pennsylvania Department of Environmental Protection’s (DEP) Office of Oil and Gas Management, talks about the opportunities the Marcellus Shale has brought to his state, it’s easy to forget that distinction.

As part of what is supposed to be a three-state, multi-county action eventually, Garfield County commissioners in Colorado approved a joint resolution Monday that is highly critical of federal Bureau of Land Management (BLM) scaled-back plans for oil shale development.

Where is rising gas supply supposed to go? New and ongoing restrictions on storage injections, moderate springtime weather being prevalent and a five-day string of futures losses pressured the cash market into losses at nearly all points Friday. The usual weekend decline of industrial load was an additional, albeit minor, bearish factor.

According to the National Weather Service (NWS), the Feb. 5-9 workweek was supposed to feature above-normal temperatures in virtually all of the East and the eastern end of the Southwest (see Daily GPI, Jan. 30). But revealing the uncertainty of weather forecasts made several days in advance, the impending return of sub-freezing lows in the Midwest and New England and lows in the 30s in the lower Northeast and South resulted in double-digit price gains across the board Tuesday.

What was supposed to be a rather bearish week, based on previous forecasts of above normal temperatures throughout the eastern half of the U.S., instead saw substantial price upticks nearly across the board Tuesday. Sources credited a second day of screen strength, anticipation of another report of storage withdrawals — and oh yes, vestiges of the 2002/03 winter that seems to have more lives than a cat — as the key drivers of the cash market.

Despite Nymex’s nearly 20-cent tumble, spot gas prices were up sharply in many regions again on Monday. The only locations in the red compared to Friday were in Texas and parts of the Midcontinent. Meanwhile, New York and New England prices soared, at some points by more than $2 to more than $10/MMBtu.

Expiration week is supposed to be about extreme volatility atthe New York Mercantile Exchange, but the March natural gascontract exhibited anything but that on Monday. The spot monthinched 1.9 cents lower to $2.179 yesterday, amid a session bound bya tight 4-cent trading range