Uncertain

A glimmer of hope has emerged in the natural gas and oil industry, but commodity price forecasts still are uncertain because a price recovery will depend on the success of global stimulus packages that use energy as a driver, the pace of economic recovery and the magnitude of North American gas reserves, energy analysts said in new reports.

July natural gas futures put in another tight trading range on Wednesday as uncertain traders continue to search for bullish or bearish news that they don’t already know. Despite crude futures recording a new seven-month high on Wednesday, the front-month natural gas contract traded in a slim 13.6-cent range between $3.665 and $3.801 before closing out the regular session at $3.708, down a mere 2.3 cents.

Chevron Corp. has backed off an earlier commitment to increase worldwide natural gas and oil production by 3% in the long-term because of the “uncertain point in the global economy,” but 2009 output should jump 4% from 2008 levels because of the slate of new projects nearing completion, CEO Dave O’Reilly said last week.

Chevron Corp. CEO Dave O’Reilly on Tuesday said the company can’t commit to a long-term 3% increase in its worldwide natural gas and oil production because of the “uncertain point in the global economy,” but 2009 output should jump 4% from 2008 levels because of the slate of new projects nearing completion.

Even in an environment of plunging oil and natural gas prices, a credit crisis and an uncertain stock market, the energy sector has begun to unveil strong 3Q2008 earnings. The announced profit gains, however, could take a back seat to the quarterly conference calls, in which executives already have begun to hint at their exploration and production (E&P) plans — and possible cutbacks — for the coming year.

Even in an environment of plunging oil and natural gas prices, a credit crisis and an uncertain stock market, the energy sector is preparing to unveil what should be strong 3Q2008 earnings over the coming few weeks. The announced profit statements, however, could take a back seat to the quarterly conference calls, in which executives likely will hint at their exploration and production (E&P) plans — and possible cutbacks — for the coming year.

While the future of Nevada’s multi-billion-dollar Ely coal-fired generation and transmission line project remains uncertain, Sierra Pacific Resources’ two utilities are pursuing a three-part strategy to develop alternatives — more energy efficiency, renewables and traditional natural gas-fired generation. Current capital expenditure plans do not anticipate Ely construction starting during the next three years.

While the future of Nevada’s multi-billion-dollar Ely coal-fired generation and transmission line project remains uncertain, Sierra Pacific Resources’ two utilities are pursuing a three-part strategy to develop alternatives — more energy efficiency, renewables and traditional natural gas-fired generation. Current capital expenditure plans do not anticipate Ely construction starting during the next three years.

Acknowledging that the timing of its plans for a coal-fired power plant and high-voltage transmission line are uncertain, Nevada Power Co. said last Wednesday it will move up its filing to build a 500 MW natural gas-fired combined-cycle plant adjacent to its existing 144 MW Harry Allen Generating Station 35 miles north of Las Vegas.