Traded

With natural gas demand and prices falling and U.S. inventories at their second-highest levels ever, gas exchange traded funds (ETF) are still looking bullish, according to Tom Lydon, a Newport Beach, CA-based investment consultant with Global Trends Investments.

Recording their second consecutive volatile reaction to a natural gas storage report (see Daily GPI, April 3), May natural gas futures on Thursday morning traded violently up and down surrounding the news that 20 Bcf was injected into underground inventories for the week ending April 3. Following the two-minute mayhem, the prompt-month contract resolved lower before closing the session at $3.610, down only two pennies from Wednesday’s finish but 19.1 cents lower than the previous week’s finish.

After inching higher to close last week’s action, May natural gas futures on Monday traded in a tight 9.8-cent range before closing out the regular session at $3.732, down 6.9 cents from Friday’s finish.

Less than a year after its launch as a publicly traded independent, Oklahoma City-based Crusader Energy Group Inc. has filed for voluntary bankruptcy protection. Crusader primarily develops unconventional resource plays. Most of its production has focused on the Anadarko Basin, the Barnett Shale, Delaware Basin, Val Verde Basin and the Bakken Shale. Crusader until early 2008 was privately held, but last June it completed a merger with Dallas-based Westside Energy Corp. and began operating as a public company (see Daily GPI, June 30, 2008). At the end of 2007 the combined companies had a net proved reserve base of more than 150 Bcfe, 80% weighted to natural gas, with an estimated reserve life of 15.8 years. Combined production at year-end 2007 was more than 26,000 Mcfe/d, 75% gas. The total leasehold at the end of 2007 was more than 765,000 acres (316,000 net), with 92% undeveloped. The Chapter 11 filing was made in U.S. Bankruptcy Court for the Northern District of Texas. Crusader is “continuing its discussions with various parties regarding strategic alternatives, which may include a potential sale of all or substantially all of its assets, a sale of the company or reorganizing the company and its existing capital structure…” Based on its current financial condition, management determined that “it was in the best interest of the company and all of its stakeholders” to seek bankruptcy protection.

Natural gas futures bulls continued to lick their wounds Friday as the March contract traded within its well-established recent range before closing at $4.452, down 3.3 cents from Thursday and 32.2 cents lower than the previous week’s finish.

Traders on Wednesday added more fuel to the range-bound trading argument as March natural gas futures traded in a fairly slim 18.7-cent range during the regular session between $4.533 and $4.720. The prompt-month contract ended up closing at $4.597, up 8.4 cents from Tuesday’s regular session finish.

FERC has its doubts about granting Franklin Resources Inc. blanket authority to buy unlimited amounts of securities in U.S. traded utilities for its clients, the Commission revealed, recently labeling the investment firm’s application deficient and sending the company, generally known as Franklin Templeton Investments, a detailed and extensive list of questions to be answered (EC08-111).

FERC has its doubts about granting Franklin Resources Inc. blanket authority to buy unlimited amounts of securities in U.S. traded utilities for its clients, the Commission revealed, recently labeling the investment firm’s application deficient and sending the company, generally known as Franklin Templeton Investments, a detailed and extensive list of questions to be answered (EC08-111).

With traders possibly worn out from the recent lack of direction in the natural gas futures market, the January contract on Wednesday unsurprisingly traded within a snug 20-cent range before closing out the regular session at $6.347, down 7.7 cents from Tuesday’s close.