Watched

North American natural gas producers have watched their fortunes soar and dramatically fall to earth in recent months and some of them, now unable to access bank financing, are doing what they have to do to remain solvent. Independents starved for cash but weighted with healthy assets are forming joint partnerships, selling assets and waiting for what may be the inevitable: a land grab by oil majors flush with cash.

North American natural gas producers have watched their fortunes soar and dramatically fall to earth in recent months and some of them, now unable to access bank financing, are doing what they have to do to remain solvent. Independents starved for cash but weighted with healthy assets are forming joint partnerships, selling assets and waiting for what may be the inevitable: a land grab by oil majors flush with cash.

Cash traders on Wednesday watched most delivery point averages across the country slip by a few pennies to nearly 40 cents, but afternoon news of a pipeline-impacting explosion in the Gulf of Mexico could rattle some cages on Thursday.

As they watched their respective share values plummet last Wednesday as a result of the Department of Justice’s (DOJ) findings that financial futures exchanges that also act as clearinghouses are barriers to competition, the New York Mercantile Exchange (Nymex) and the Chicago Mercantile Exchange (CME) — which are currently in talks for an $11 billion merger — fired back.

As they watched their respective share values plummet Wednesday as a result of the Department of Justice’s (DOJ) findings that financial futures exchanges that also act as clearinghouses are barriers to competition, the New York Mercantile Exchange (Nymex) and the Chicago Mercantile Exchange (CME) — which are currently in talks for an $11 billion merger — fired back.

May natural gas futures pushed 9.1 cents higher Wednesday to close at $7.689 as traders watched May options expire and awaited fresh storage news from the Energy Information Administration (EIA) Thursday morning. The June contract, which will take over prompt-month status in Globex electronic trading Thursday afternoon, closed 7.3 cents higher Wednesday at $7.781.

Traders watched in awe Thursday morning as the sizeable year-over-year storage surplus, which stood at 400+ Bcf just four short weeks ago, switched to a 26 Bcf deficit following the Energy Information Administration’s (EIA) 224 Bcf withdrawal report for the week ended Feb. 2. Although trading a fairly tight range, March natural gas futures zig-zagged on Thursday, putting in a low of $7.710 and a high of $7.935 before settling at $7.871, up 16.2 cents from Wednesday.

The industry was keeping its collective fingers crossed Friday as it watched the potentially destructive Hurricane Dennis eventually land in south-central Cuba on its way to the eastern Gulf of Mexico (GOM). The situation kept prices on the rise in most of the East. Except for a few flat to as much as 20 cents higher points, western markets tended to be weaker overall, with losses ranging up to about 30 cents.

The Energy Information Administration (EIA) has changed the revision policy for its weekly natural gas storage report (WNGSR), the most widely watched indicator of supply and demand in the natural gas marketplace. The agency has decided to allow unscheduled revisions on any federal workday between 2 p.m. and 2:10 p.m. ET only if the impact of the reported change is greater than 10 Bcf in any region or nationally.