Watching

Anyone watching and listening to energy markets knows that with higher and more volatile commodity prices comes the more frequent utterance of words such as “speculation” and “manipulation,” often in the same breath.

As the anniversary of Hurricane Katrina approached, the energy industry was watching ominous Tropical Storm Ernesto, which was strengthening in the Atlantic Basin Friday night. As of 5 p.m. EDT Friday the National Hurricane Center (NHC) was predicting that Ernesto would become the season’s first hurricane by Monday and could track right into the center of the Gulf of Mexico possibly targeting the Texas or Louisiana coasts.

Tired of watching natural gas futures spiral lower over the last couple of weeks without much respite, traders pushed the November contract higher Friday in what market watchers were calling a short-covering rally. After putting in a high of $5.735, the prompt month closed out the week at $5.620, up 22.8 cents on the day but 26.1 cents lower for the week.

It will take years to develop, but industry observers are watching what may be the most significant discovery in the Gulf of Mexico (GOM) deepwater to date. The discovery was announced last week by Chevron Corp., Devon Energy Corp. and Statoil ASA after the trio completed the deepest extended drill stem test in history, with a successful production test on the Jack No. 2 well at Walker Ridge Block 758.

As the one-year anniversary of Hurricane Katrina approached, the energy industry was watching a possibly ominous Tropical Storm Ernesto, which was strengthening in the Atlantic Basin.

Natural gas futures trading on Wednesday was akin to watching paint dry as the May contract traded within a tidy 22-cent range from $6.940 to $7.160, making it the second half-hearted effort to sub-$7 prices in as many days. The prompt month ended up settling at $7.069, up less than half a cent from Tuesday’s close.

Very little gas changed hands on Friday as many traders were displaced by the hurricane, while others stood by watching and waiting for some news about the impact on Gulf production and operations. Most business was done on Thursday for a four-day period (Friday-Monday). There was some choppy intraday business, and, aside from high quotes in the Northeast and Gulf Coast, prices generally reflected the weakness of the futures market on Friday. Near month futures fell 46.6 cents to end the day at $12.324.

Consumer groups, businesses and state lawmakers are all watching closely how California Gov. Arnold Schwarzenegger in the next few weeks handles the upcoming two vacancies on the five-member California Public Utilities Commission. Indications are his administration’s appointments secretary will be getting a steady stream of candidates from all sectors of the state.

Consumer groups, businesses and state lawmakers are all watching closely how California Gov. Arnold Schwarzenegger in the next few weeks handles the upcoming two vacancies on the five-member California Public Utilities Commission. Indications are his administration’s appointments secretary will be getting a steady stream of candidates from all sectors of the state.