Weak

Drilling activity in Texas declined steadily through April, reflecting “very weak natural gas markets and defying a crude price rally,” according to the Texas Petro Index (TPI), which was issued on Friday. Employment in the state’s exploration and production (E&P) industry has dropped to its lowest level since January 2008.

Drilling activity in Texas declined steadily through April, reflecting “very weak natural gas markets and defying a crude price rally,” according to the Texas Petro Index (TPI), which was issued on Friday. Employment in the state’s exploration and production (E&P) industry has dropped to its lowest level since January 2008.

An already weak natural gas futures market further collapsed on Thursday after the Energy Information Administration (EIA) reported that a whopping 103 Bcf was injected into underground storage for the week ended May 15. The data proved that despite drastic rig reductions, gas is still being stored at a rate that is well above industry expectations. June natural gas futures closed Thursday’s regular session at $3.603, down 36.7 cents from Wednesday’s finish.

Weak commodity prices and tight credit markets, in part, have prompted Chesapeake Energy Corp. to pull employees from its Charleston, WV, eastern division regional headquarters for release or relocation to corporate headquarters in Oklahoma City. The move will consolidate talent as Chesapeake pursues development of the Marcellus Shale, the company said last Thursday.

Weak commodity prices and tight credit markets, in part, have prompted Chesapeake Energy Corp. to pull employees from its Charleston, WV, eastern division regional headquarters for release or relocation to corporate headquarters in Oklahoma City. The move will consolidate talent as Chesapeake pursues development of the Marcellus Shale, the company said Thursday.

In acknowledgment of the weak economy and drilling cutbacks by producers, Spectra Energy Corp. executives last Thursday emphasized the insulation from commodity price fluctuations enjoyed by the company’s fee-based processing businesses, and they noted that 80% of Spectra customers have investment-grade credit ratings.

In acknowledgment of the weak economy and drilling cutbacks by producers, Spectra Energy Corp. executives Thursday emphasized the insulation from commodity price fluctuations enjoyed by the company’s fee-based processing businesses, and they noted that 80% of Spectra customers have investment-grade credit ratings.

All points were finally on the same page again Friday, and that page said “down.” Prices fell across the board, succumbing to weak weather-based demand, a bearish storage report that resulted in a 28.2-cent dive by June futures Thursday, and the usual weekend decline of industrial load.

While in the short term North American natural gas markets may be weak, they will eventually strengthen and move back closer to oil prices as globalization of the commodity continues to unfold, according to Goldman Sachs & Co. economist David Greely. In the long term, the global trade and pricing of natural gas will be set by Russia, with its 54 Bcf/d of gas production, he said.