Usually

When EOG CEO Mark Papa opens his mouth, the words “bullish on gas prices” usually are among the first to come out, but this year Papa’s backing up his words with actions. None of EOG’s North American natural gas production is hedged in 2004 and 2005 because Papa said he expects gas prices to remain above $5/MMBtu (Henry Hub) for at least the next five years.

When EOG CEO Mark Papa opens his mouth, the words “bullish on gas prices” usually are among the first to come out, but this year Papa’s backing up his words with actions. None of EOG’s North American natural gas production is hedged in 2004 and 2005. Papa said he expects gas prices to remain above $5/MMBtu (Henry Hub) for at least the next five years.

Usually Northern Natural Gas extends a System Overrun Limitation notice only on a day-by-day basis, but as of Friday it said the SOL for all market-area zones that had begun nearly two weeks earlier would remain in effect through at least Monday (March 3).

The first measurement of a usually obscure factoid by a part of state government was widely reported last weekend, when California state water resources officials trudged up to several key points in the Sierra Nevada range 90 miles east of Sacramento and measured snow levels at two-thirds of a normal winter already. That translates into greater hydroelectric resources, which translates into a better chance for the state avoiding blackouts this summer. It also means less gas demand for power generation in the state next summer.

“No storm hype here,” a Gulf Coast producer said Friday morning in classic understatement. Usually the approach of a tropical storm toward the Gulf of Mexico production area is a surefire guarantee of higher gas prices, but it was not to be this time. Despite the likelihood of increasing offshore shut-ins over the weekend, traders sent cash prices lower by anywhere from a couple of cents to nearly 30 cents at border-SoCalGas; most declines were on either side of a dime.

No one can really predict the weather, “but at the rate winteris setting in, by the middle of February we’ll be where we usuallyare in April” in regard to natural gas in storage, according toThomas A. Petrie, chairman of Petrie Parkman & Co. in Denver.

Improving crude oil market conditions usually are accompanied byincreasing political scrutiny into rising prices. A good example ofthat is occurring in California where Attorney General Bill Lockyerhas vowed to probe deeply into the mergers of major oil and gasproducers following a report that shows consolidation is one of thereasons California has experienced some of the highest gasolineprice spikes in the nation.

In Washington, it usually pays to know people in high places.But even Sen. Frank Murkowski (R-AK) couldn’t help Nicholas Bush,the ex-president of the Natural Gas Supply Association (NGSA), whowas sentenced to 3 1/2 years in federal prison for embezzlementlast week and ordered to pay restitution in the amount of $3.5million.

Prices usually spend Mondays recovering at least partially fromthe declines of the previous Friday. Yesterday was a reversal formost eastern points-they were giving back some of the gains thathad been realized Friday. The East tended to range from flat todown as much as a dime or more on a few Gulf Coast pipes.Trunkline’s two Louisiana pools were especially weak.