Markets

September was the 22nd consecutive month that saw a decline in the Texas Petro Index (TPI), a barometer of upstream oil and natural gas activity in the Lone Star State. No one in the energy patch is going to call this recovery a quick one.

Southern California Gas Co. (SoCalGas) on Tuesday formally asked California regulators for approval to reopen the Aliso Canyon underground natural gas storage field along the northern fringes of Los Angeles that has been closed since a leak occurred a year ago (see Daily GPI,Feb. 18).

San Antonio-based Pioneer Energy Services reported modest rig count growth and a sequential uptick in production services activity during the third quarter, reinforcing management’s earlier view that the market hit bottom in 2Q2016.

Both physical natural gas and futures continued their trek lower in Wednesday trading as the specter of mild weather prompting storage builds at record levels well into November had traders embracing the bearish argument for the near term.

December natural gas is expected to open 4 cents lower Tuesday morning at $2.99 as traders factor in a modest decline into long-term support and weather models remain moderate. Overnight oil markets gained.

Battered by a two-year rout in oil prices, Royal Dutch Shell plc and BP plc fought back, posting surprising improvements to the bottom line in the third quarter by clobbering costs and honing efficiencies in a sustained period of lower commodity prices.

Overall November bidweek trading fared far better than the free-falling natural gas futures market as the NGI National Bidweek Average eased a modest 3 cents from October bidweek to $2.48, while the November futures settled at $2.764, down a stout 18.8 cents from the settle of the October contract.

Physical natural gas for Wednesday delivery had the trajectory of a safe falling from a 10-story building in Tuesday’s trading.

December natural gas is set to open 3 cents higher Monday morning at $3.14 as traders look beyond near-term weather outlooks calling for continued mild conditions in major energy markets. Overnight oil markets fell.