Weakened

With Mexico’s President Vicente Fox weakened politically following the recent national election, opposition lawmakers said Thursday they would contest a program to tender natural gas production contracts to outside investment. In July, Petroleos Mexicanos (Pemex) unveiled its first package of multiple service contract (MSC) bids on seven blocks of the Burgos Basin (see Daily GPI, July 18).

In a market that was already weakened by technical bearishness, natural gas futures were sent spiraling lower Friday on reports that the El Nino weather pattern will bring above-normal temperatures to the central United States this winter.

Natural gas prices have weakened in recent weeks, but they may weaken even more in the coming weeks because of two things: corrections to the “huge” inventory overhang and weakening oil prices, which will put pressure on gas prices in the short term, according to Lehman Brothers in its latest “Oil & Gas: Exploration & Production Update.”

Fueled by a weakened appetite for natural gas in the industrial sector, forecasts of normal weather for winter, bulging storage stocks and a grim economic fallout from the Sept. 11 terrorist attacks, the Natural Gas Supply Association projected last Tuesday that gas demand will be flat this winter compared to last year.

Fueled by a weakened appetite for natural gas in the industrial sector, forecasts of normal weather for winter, bulging storage stocks and a grim economic fallout from the Sept. 11 terrorist attacks, the Natural Gas Supply Association projected Tuesday that gas demand will be flat this winter compared to last year.

UtiliCorp United reported a 15% second-quarter earnings risedespite weakened performance in its energy delivery segment,sharply diminished results from Aquila Gas Pipeline, and anelectric rate cut in Missouri. Growth in wholesale energy marketingand international operations get the thanks for boosting 1998second quarter earnings to $23.4 million from $20.3 million a yearearlier.