Threat

December natural gas slipped lower in light trading Friday as traders continue to see little threat of higher prices in the near term but also see a dearth of sellers at present prices. At the close January had fallen 6.4 cents to $3.584 and February had retreated 6.2 cents to $3.613. January crude oil added 76 cents to $100.96/bbl.

Anadarko Petroleum Corp. officials see the Macondo deepwater Gulf of Mexico (GOM) well blowout from last year as no longer a threat to the company’s future earnings results as it was in the recently completed third quarter. A $4 billion settlement with BP plc has resolved all of the major pending litigation involving Anadarko.

Relatively cool weather in most of North America has yet to translate into substantive heating load increases; a tropical storm threat remains nonexistent and likely to stay that way through the final two months of the 2011 Atlantic season; and a screen drop of 8.1 cents Friday kept downward pressure on the cash market. The return of industrial load from its weekend decline provided weak market support.

With weather, futures, the weekend factor and lack of tropical threat appearing mostly bearish, it wasn’t quite clear how a substantive portion of the cash market managed to achieve small rebounds Friday. But flat to moderately higher numbers showed up at a majority of points, primarily in the Midcontinent/Midwest, Gulf Coast and Rockies.

Prices shot higher by double-digit amounts nearly across the board Thursday as a palpable threat to Gulf of Mexico (GOM) production grew more intense, cash numbers had substantial support from the previous day’s 14.5-cent futures rise, and some regions such as the Midwest were heating up, although their contribution to cooling load was likely to be brief.

Following through on his threat, New York State Attorney General Eric Schneiderman sued the federal government last Tuesday for not conducting a full environmental review of proposed regulations for Marcellus Shale development in the Delaware River Basin.

Following through on his threat (see Shale Daily, May 31), New York State Attorney General Eric Schneiderman sued the federal government Tuesday for not conducting a full environmental review of proposed regulations for Marcellus Shale development in the Delaware River Basin.

June natural gas futures rose Monday as traders viewed rising floodwaters as a threat to supply, and those holding short positions elected not to fight the trend. At the close June had risen 7.2 cents to $4.318 and July was up 6.8 cents to $4.379. June crude oil skidded $2.28 to $97.37/bbl.

Elected officials at all levels of government in Pennsylvania should implement regulations to block gas extraction in “pristine places and locations near where people live or work,” said the PennEnvironment Research and Policy Center. The group said it has documented well sites within two miles of more than 320 daycare facilities, 67 schools and nine hospitals in the state. PennEnvironment also called on lawmakers to strengthen clean water laws, “halt the use of toxic chemicals” in hydraulic fracturing and increase resources available to regulators. In addition, PennEnvironment called on the federal government to “end the special treatment for the gas industry and apply the nation’s core public health and environmental laws to gas extraction, just as it would regulate any potential threat to public health or the environment.”