Unpredictable

Natural gas traders on Tuesday breathed a small sigh of relief as the unpredictable Hurricane Ike changed paths to a more westerly course that should spare much of the Gulf of Mexico’s energy infrastructure. Despite the news, October natural gas futures settled almost unchanged at $7.535, due likely to the fact that it is still early and the storm’s path could very well change again.

Enduring an unpredictable week of violent storms, heat waves and the rollercoaster-like antics of the natural gas futures market, cash points on Friday moved in lockstep lower, with most points shedding just a few pennies up to 15 cents.

The natural gas futures market kept up its unpredictable behavior on Friday by doing the opposite of what most within the industry had been expecting. While traders and analysts largely thought the December contract was working down to test the lower end of the recent range at $7.500, it ended up doing the complete opposite by climbing to finish out the week at $8.001, up 30.1 cents from Thursday and 10.4 cents higher than the previous Friday’s close.

While price volatility challenges everyone in the gas industry, unpredictable basis differentials and a dearth of basis hedging mechanisms have become a thorn in the side of producers especially.

While they appear at first glance to be strange bedfellows, even in California’s unpredictable regulatory milieu, the newest regulator on the five-member California Public Utilities Commission (CPUC), Dian Grueneich, told an industry group earlier this month that she is a strong advocate for both addressing global climate change and exploring clean coal power generation options. Coming from a Democrat who was appointed late last year by Republican Gov. Arnold Schwarzenegger, that should not be too surprising.

While they appear at first glance to be strange bedfellows, even in California’s unpredictable regulatory milieu, the newest regulator on the five-member California Public Utilities Commission, Dian Grueneich, told an industry group Friday she is a strong advocate for both addressing global climate change and exploring clean coal power generation options. Coming from a Democrat who was appointed late last year by Republican Gov. Arnold Schwarzenegger, that should not be too surprising.

Occidental Petroleum, the unpredictable mid-size producer, holdssome wild cards in California’s unfolding natural gasrestructuring, and it’s so far playing them close to the vest.Independents in the south San Joaquin Valley oil patch think Oxy is”up to something,” perhaps a merger with another Californiaproducer, while others are watching the company put increasinglymore gas supplies on the market since buying Elk Hills reservesfrom the federal government two years ago.