GAS FUTURES UP 7.6%
Natural gas futures prices jumped by their highest margin in more than three months on Tuesday, amid hope that booming U.S. gas production is slowing and as forecasts for cooling temperatures raised hopes for late-season gas-fired heating demand.
Natural gas futures rose 7.6% to settle at $2.088 a million British thermal unit on the New York Mercantile Exchange, the highest in more than two months. The market has lost more than 10% this year, as a mild winter limited heating demand. But losses have been pared in recent weeks, as a cool start to spring has buoyed expectations for demand.
Stored inventories of natural gas are nearly 50% higher than average for this time of year, amid robust production and weak winter demand. With the market now in the so-called shoulder season between winter and spring when producers usually begin adding to inventories, the late-season cool temperatures are raising hope that inventories won't continue so oversupplied.
The market is also gaining support from the sharp decline in oil-rig counts in the U.S., which have fallen more than 70% in the past year. Natural gas is a by-product of shale oil production, and the drop in the number of oil rigs is beginning to reduce gas production as well.
"The fundamental picture does appear to be strengthening if you look forward," said Gene McGillian, senior analyst at brokerage Tradition Energy. Still, he said, with the huge amount of gas in storage, "The immediate picture doesn't make a strong case for an explosive rally."
The latest revised weather forecasts show a previously-expected warming on the eastern seaboard is softening, with below-normal temperatures in the northeast in late April and average temperatures for the start of May. "Short-term temperature views are taking on a more bullish hue, with below-normal trends expected for the northeast region of the country," research consultancy Ritterbusch and Associates said in a note.
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Libya’s oil production increased steeply to the current level of 850,000 b/d from a low point in August 2016 of below 300,000 b/d. Production surpassed 1 million b/d in July.
- Revenue of $7.9 billion increased 6% sequentially - Pretax operating income of $1.1 billion increased 11% sequentially - GAAP EPS, including Cameron integration-related charges of $0.03 per share, was $0.39 - EPS, excluding Cameron integration-related charges, was $0.42 - Cash flow from operations was $1.9 billion; free cash flow was $1.1 billion
“The combination of GE Oil & Gas and Baker Hughes closed on July 3, and we are pleased with our progress during our first operating quarter. Despite the continuing challenging environment, we delivered solid orders growth and secured important wins from customers, advanced existing projects and enhanced our technology offerings in the quarter. We also achieved key integration milestones and made significant progress working as a combined company. I am now more convinced than ever that we combined the right companies at the right time,” said Lorenzo Simonelli, BHGE chairman and chief executive officer.
U.S. Rig Count is up 360 rigs from last year's count of 553, with oil rigs up 293, gas rigs up 69, and miscellaneous rigs down 2 to 2. Canada Rig Count is up 59 rigs from last year's count of 143, with oil rigs up 38 and gas rigs up 21.