Tested

After the rally stalled on Monday as traders instead tested downside support, natural gas futures bulls on Tuesday once again pressed the upside, scoring a 14.7-cent gain to close the day’s regular session at $4.449. Commodities on the whole showed impressive strength with June crude futures picking up 35 cents to close at $58.85/bbl.

May natural gas futures tested lower price levels in Wednesday morning trade before rebounding in a big way during the afternoon. After notching a $9.400 low, the prompt-month contract soared to a $9.950 high before closing out the day at $9.832, up 10.8 cents from Tuesday. May crude also rebounded Wednesday, gaining $3.85 to close at $104.83/bbl.

Natural gas futures traders on Thursday once again tested resistance up at $9.050 and once again found it a little too rich for their liking as the March contract went on to record a low of $8.890 before closing out the day at $8.891, down 7.4 cents from Wednesday’s close.

BP Exploration & Production Inc. announced a hydrocarbon discovery in an exploration well that tested its Isabela prospect in the deepwater Gulf of Mexico (GOM). The well is located on Mississippi Canyon Block 562 in 6,500 feet of water, about 150 miles southeast of New Orleans. Isabela was drilled to a total depth of 19,100 feet into Miocene era sands. “Isabela is an excellent addition to our portfolio of discoveries in the Gulf of Mexico,” said Dave Rainey, BP’s Vice President of GOM Exploration. “It will likely be tied back to our Na Kika production platform, helping to maximize the value of that infrastructure.” The well is operated by BP with a 67% working interest and is co-owned by Noble Energy Inc. with a 33% working interest. The lease was acquired at in March 1998.

Talisman Energy Inc. said it hit pay dirt again in the Alberta Foothills. A new well tested at a gross rate of 14 MMcf/d but if left unrestricted by surface equipment would have had an estimated absolute open flow rate potential of 372 MMcf/d and estimated wellhead absolute open flow rate potential of 94 MMcf/d. The well is expected to be tied-in during the second quarter of 2007.

Talisman Energy Inc. said it hit pay dirt again in the Alberta Foothills. A new well tested at a gross rate of 14 MMcf/d but if left unrestricted by surface equipment would have had an estimated absolute open flow rate potential of 372 MMcf/d and estimated wellhead absolute open flow rate potential of 94 MMcf/d. The well is expected to be tied-in during the second quarter of 2007.

In the holiday-shortened trading session on Friday, February natural gas, on limited volume, tested lower first before rebounding in the afternoon. After failing to gain traction to the upside, the prompt month ended up settling nearly unchanged at $11.225, two-tenths of a cent higher on the day, but $1.177 lower for the week. Trading closed at 1 p.m. EST Friday ahead of the New Year’s Day holiday weekend.

Saying Questar Crossover 16 receipt point gas quality was tested and adheres to its tariff standards (see Daily GPI, May 7), Northwest resumed accepting nominations there in Wednesday’s intraday cycle.

The Northeast power grid could be tested this summer, but it looks like California will get another break because of forecasts for cooler than normal temperatures, according to the latest information from Weather Services International (WSI).