Daily GPI / NGI All News Access

June Ekes Out Measly 2.6-Cent Gain on Expiration Day

June Ekes Out Measly 2.6-Cent Gain on Expiration Day

"Orderly" and "quiet" are not words that typically describe the natural gas futures market-especially during hectic expiration-day trading at Nymex. However, yesterday they were fitting descriptions of a market that was only able to inch higher amid light commercial short-covering. The June contract closed out its tenure as the prompt month with a 2.6-cent gain to settle at $2.226.

"[Wednesday's] expiration was as calm as any I can remember, a Gulf trader said, adding that the choppy buying and selling you usually see was almost perfectly balanced yesterday.

However, June's expiration was not the only thing on the market's plate yesterday. Fresh supply and demand data from the American Gas Association (AGA) and the National Weather Service (NWS) was released yesterday afternoon. Although that news came too late to impact the June contract, it did have an immediate bullish effect on the rest of the Nymex strip. The AGA struck first by releasing its latest storage report, which featured a 73 Bcf injection into the ground. However that refill fell short of market expectations centered on 80-100 Bcf, and last year's 92 Bcf build. Moments later the NWS released its latest six- to 10-day forecast calling for above and much above-normal temperatures for almost three-quarters of the nation extending from west of the Rockies to the Atlantic Ocean. Only California and Nevada are expected to see below-normal readings, the NWS said.

The July contract wasted little time reacting positively to the fundamental news, spiking a nickel higher to $2.26 in last night's Access trading session. But despite the market's eager gains last night, a Southeast trader remains bearish. "This is only a knee-jerk reaction to the storage report. We could retest the $2.30 level, but in the end this market is headed lower," he speculated. And who will be the ones to push it lower? "Locals who will be gunning for fund sell stops in the $2.13-16 area," he continued.

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus