For the fifth week in a row, natural gas futures climbed higheron Friday, as traders loaded up on a little bit of storm insuranceahead of the weekend. Their fear, whether warranted or not, is thatthe market will spike higher Monday morning on the news that a fullscale hurricane is bearing down on gas production assets in theGulf of Mexico. And while it seemed a very unlikely event as ofpress time Friday, it was enough to promote the September contractup 3 cents to $4.436 in a very quiet session.

Tropical Storm Chris became the next contestant in the NorthAtlantic Hurricane Season on Friday with maximum sustained windsnear 40 MPH.

Despite the storm threat and the small gain achieved Friday,traders were somewhat disappointed by the market’s performance. “Wefailed on all three counts, said Tom Saal of last week’s priceaction. “[The market] had a lower high, a lower low and a lowersettle than we had [the week prior]. Just about the only positivepoint was that we settled in the $4.40s.”

Looking ahead, Saal maintains that the longer the marketconsolidates within the recent $4.20-565 range, the better chanceit has of moving to the upside. However, in order for that tohappen, the market will need to get through another potentialMonday sell-off.

Of the past seven weeks, six have begun with a loss for theprompt month, dating back to a 36.7-cent falloff following the long4th of July holiday weekend. On average, the spot contract has sunk12 cents during those seven trading sessions. In fact, the onlytime the market moved higher to kick off a week, was on August 8when traders came back from the weekend to the news that Albertohad become a hurricane in the Atlantic.

That has left traders in somewhat of a conundrum each weekend— risk either a hurricane-related spike or sell-off each Monday.To manage that sort of volatility, Saal suggests buying out of themoney put options. “We were advising our customers to buy $4.25 putoptions for about 6 cents [Friday]. If the market stabilizes orgoes higher on Monday, you just sell your option back to themarket. It’s not a long-term trade — just something to get youthrough the weekend. In that respect, it’s kinda like renting anoption. It’s a low-risk trade in a high risk market,” he said.

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