With the Atlantic hurricane season officially begun and July natural gas closing at $7.878 on Friday, traders expected that another attempt at breaking above the $8 threshold could very well be in the cards in the near future. That future came earlier than expected on Monday as the prompt month punched above the psychological $8 resistance level to close at $8.191, up 31.3 cents on the day.

July natural gas put in a $7.945 low in morning trade before exploding higher to record a high of $8.210 just before 2 p.m. EDT. A prompt-month natural gas contract has not settled this high since all the way back on Dec. 1, 2006, when the January 2007 contract settled at $8.422.

“We had a really big move Monday, which made no sense to me,” said a Washington, DC-based broker. “I don’t know whether the move had something to do with the cyclone outside the Persian Gulf, which may disrupt shipping or loading, possibly liquefied natural gas loading. I really can’t explain it. Walking in Monday morning, natural gas and heating oil markets took off to the upside while crude and gasoline were lower.

“From what the trading floor told me, there was a lot of technical buying going on,” he added. “I don’t know whether that meant stops were going off to cover short positions. We broke down with the expiration of the June contract last week, but the July contract has been pretty strong so far. With this punch through Monday, maybe people are now saying we are back above the uptrend line, so it’s time to try to buy at the bottom of the trough with the idea of it rallying up around $8.400 or $8.500.”

Despite Monday’s settle comfortably above the recent stumbling block at $8, the broker said he still believes the market is range-trading. “If anything, I still think all we are seeing is choppy range-bound trading until we get above $8.400 to $8.500 convincingly,” he said. “I think we are still stuck within the $7.500 to $8.500 band. We came down last week and are now rallying off of the low. Why traders picked Monday to make the move, I don’t know.”

The late development Friday of Tropical Storm Barry did not help the case of market bears either. While the storm proved harmless, its early and rapid formation served as an all-too-real reminder that the season has begun.

The DC-based broker said Barry probably did not factor into Monday’s price move. “If anything, all Barry brought was some rain and downed power lines, which reduced electricity demand and therefore natural gas demand,” he said. “The price jump doesn’t make sense because we are likely going to have another 100 Bcf injection in this week’s storage report. Temperatures are supposed to heat up at the end of this week, but we should be relatively mild up till then, so there is no runaway weather demand.”

Prior to Monday’s session, some market experts were predicting another visit to $8. “Deja vu all over again,” said Jay Levine, a broker with enerjay LLC. “Natural gas seems not to only to be threatening yet again to ‘take out’…$8, and who-knows-what beyond, but seems quite comfortable hanging around the mid if not high $7s.”

Levine noted Monday morning that current market factors will at the very least make energy futures price slippage more difficult. “Sure, there are legitimate concerns surrounding the entire complex — including the ever-present concerns of the geopolitical tinderbox — and we’ve just entered the ‘official’ start of the hurricane season, and there’s no telling what that’ll bring, and that in and of itself should [be] supportive — if not prevent a major slide.”

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