Following a five-day, 30-cent price drop, the natural gasfutures market dug in its claws Friday as scale-down industrialbuyers found good value in winter gas prices. Gaining 6.2 cents tofinish at $2.608 the October contract was only the tip of theiceberg. Led by the December contract, which was up 7.7 cents to$2.974, the winter strip (Nov.-Mar.) posted an impressive 5.6-centgain.

“Two-fifty to $2.43 basis Oct. is our target for buyers lookingto pick up winter requirements,” remarked Ed Kennedy of Miami-basedPioneer Futures. “Looks like some [buyers] jumped the gun today.”The October contract only reached as low as $2.505 Friday. Becausethe market found such solid support at $2.50, Kennedy believesFriday’s gains may grow this week. “A settlement above $2.65 couldreally get this thing going, he continued.

But Susannah Hardesty of Indiana-based Energy Research &Trading believes that if no new storms develop, prices couldcontinue lower this week. “But don’t try to squeeze every penny outof this market. There will be massive industry and spec buying donewhen lows are perceived,” she wrote in Natural Gas Weekly Reportdated Sept. 16. Looking ahead to this week’s storage report,Hardesty expects to see another solid build between 75 – 95 Bcf,which will easily eclipse the average of 60 Bcf needed over thenext 7 weeks in order for storage to reach the 95% full level.According to the American Gas Association, 81 Bcf was injected intounderground storage facilities for the week ending Sept. 10,bringing the total to 2,668 Bcf, which is 109 Bcf less than a yearago, but 80 more than the five-year average.

But do not be surprised to be welcomed back to the office Mondaymorning to the news of a Tropical Depression in the Gulf of Mexico.While it remains highly unlikely Hurricane Gert will have an impacton natural gas production, the National Hurricane Center wastracking an area of disturbed weather over the NorthwesternCaribbean and the Southeastern Gulf of Mexico Friday. This systemis gradually becoming better organized while moving slowly towardthe northwest. A tropical Depression may form during the next dayor two, the NHC said.

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