As stock markets rebounded Monday on news of bank rescue plans across the globe, so to did energy commodities, which have been mimicking the financial twists and turns as of late. November natural gas futures climbed 15.3 cents to close at $6.688 while November crude futures added $3.49 to close at $81.19/bbl.

After traveling below 8,000 points on two separate occasions on Friday, a burst of optimism tied to multiple bank help plans Monday pushed the Dow Jones Industrial Average up by 936 points to 9,387, setting a record for the largest single-day increase.

“The energies are really taking their cue from stocks. As they go, we go for the time being,” said a New York trader. “The shoring up of banks along with the renewed talk of stimulus packages supplied a boost, but I don’t know if the ‘good feelings’ are sustainable.”

Citi Futures Perspective analyst Tim Evans agreed that there is a link currently among the various markets. “The petroleum markets are sticking with their recent intense focus on the financial markets, bouncing back to the upside today [Monday] in keeping with the rebound in global equity markets and a weaker U.S. dollar.

“The natural gas market is joining with crude oil and the financial markets in exploring the upside…although we note that it continues to lack clear fundamental support. We do see more normal heating degree day accumulations for the week ending Oct. 24 as a legitimate support, but there are still at least two bearish storage reports before we’ll see the corresponding data.”

The heating season is at least another week away, according to forecasts by the National Weather Service (NWS). For the week ending Oct.18 the NWS forecast a healthy decline in heating fuel requirements relative to seasonal norms. New England is expected to receive 66 heating degree days (HDD), or 38 fewer than normal, and New York, New Jersey and Pennsylvania are forecast to experience 43 HDD, or 46 fewer than normal. The Midwest states of Ohio, Indiana, Michigan, Illinois and Wisconsin are anticipated to “bask” under 47 HDD, 46 fewer than normal.

Traders and analysts alike are also returning some of their attention to the tropics, where storm activity appears to be ramping up again. “The naming of Tropical Storm Nana brings the Atlantic hurricane season count of named storms up to 14, at or near forecast levels for the season as a whole,” Evans pointed out. “There may be time for another one to two named storms, but time is running out on the most active portions of the season, which officially ends Nov. 30.”

According to the National Hurricane Center, Nana, which was still west of the Cape Verde Islands, was still too far away for an accurate path prediction.

Improving equity markets notwithstanding, analysts suggest that the market may be running out of time to work lower as the winter heating season looms. “The low for 2007 of $5.23 was made in August. If we were to test the $6 level, we feel that it would need to test it in the next few weeks as we are approaching the heating season,” said Mike DeVooght of DEVO Capital, a Colorado-based trading and risk management firm. He added that continued weakness in heating could “push gas prices lower during the heating season.”

DeVooght currently advises both trading accounts and end-users to stand aside. Producers should continue to hold a long winter 2008 $10 put strip established earlier at 65 cents.

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