Despite trading negative for a vast majority of the day, November natural gas futures made a late run Friday to finish in the positive. After notching a low of $12.760 earlier in the session, the prompt month ended up settling at $13.219, up 11.6 cents on the day, but less than a penny lower than the previous Friday’s $13.226 settle.

There were a number of theories as to what made the market rally late, including stagnant shut-in numbers and activity in the market from embattled broker Refco.

There were some concerns Friday that the level of shut-ins still in the Gulf of Mexico might be reaching some sort of a plateau. As of Thursday, the Minerals Management Service (MMS) reported that 5,699.66 MMcf/d was shut in, or 56.99% of the Gulf’s 10 Bcf/d output. On Friday, the MMS reported that 5,647.25 MMcf/d was still shut in, equaling 56.47%.

“I do think there is an intense focus on the shut-in numbers and yes it is reassuring if we can see production march steadily forward, but in all honesty, we know production is going to return in discreet increments,” said Tim Evans of IFR Energy Services. “It’s not going to be a smooth return each and every day.”

Another theory to the late rally was attached to the ongoing turmoil surrounding Refco, which is currently embroiled in a $545 million accounting scandal. “I’m not sure what the Refco troubles contributed if anything to the market’s late rally, but there was talk that a rally in the silver market was Refco buying and dumping positions to flatten itself out,” Evans said. “I don’t know if there was any element of that in the energy futures, but we certainly saw buying in the last hour to jam it back up.”

Refco Inc. said Monday that it had discovered through an internal review a receivable owed to the company by an entity controlled by Phillip R. Bennett, CEO of the board of directors, in the amount of approximately $430 million. Bennett repaid the receivable in cash, including all accrued interest. In a Thursday press release, Refco said that the regulatory capital and excess regulatory capital of Refco LLC, its regulated Futures Commission Merchant, and Refco Securities, LLC, its regulated Broker Dealer, have been substantially unaffected by the events of the week. However, reports Friday said that Refco Securities, which accounts for more than half of Refco’s gross revenues, was unwinding clients’ and its own positions.

The New York Mercantile Exchange Inc. said late Thursday that it has been closely monitoring the activities of Refco LLC, a clearing member on both its Nymex and Comex Divisions.

“Refco LLC, a subsidiary of Refco Inc., has met and continues to meet all of its obligations at Nymex and is in good standing,” the exchange said. “All customer positions and funds held by Refco LLC are specifically segregated from firm assets in compliance with Commodity Futures Trading Commission regulations and Nymex rules. Nymex has restricted the withdrawal of any capital (including any excess capital) by Refco LLC without the exchange’s prior approval.”

As for the overall heading of the natural gas futures market, Commercial Brokerage Corp.’s Ed Kennedy said he believes things are going to work a little lower for the time being. “I think what we are seeing is over-expectation,” he said. “We built in catastrophic hurricane damage with the $14.40 through $14.70 price, and now it doesn’t appear to be catastrophic. The million dollar question now is when the final analysis is done, how much gas are we going to lose through the winter.

“We’ve lost between 2-3 Bcf with Hurricane Katrina, what we don’t know yet is how much we lost with Hurricane Rita,” he said. “The major questions out there surround how much production will be lost from Rita and what type of winter temperatures will we be looking at?”

Kennedy said it appears the market is topping with that $14.75 high from Oct. 5, although he noted that November is going to be the key. “There is a lot of tension out here about whether or not we are going to see a below normal temperature winter. It cuts both ways however. If November is above normal temperature-wise, I think it is going to take the edge off of the apprehension. If it is below normal, I think it is going to add to the apprehension. If the winter is colder than normal and we lose another 2 Bcf because of Rita, we’ve got a problem.

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