Natural gas futures were hit with another wave of selling earlyFriday as traders added to losses incurred during Thursday’s25-cent price slide. However after notching its lowest price inthree weeks at $2.87, the December contract worked its way higherto settle at $2.961, a 0.4-cent loss for the day.

Physical prices for October and November, which tumbled lower inactive last day of month trading, were a contributing factor to thedownward pressure on futures, sources told NGI. Henry Hub pricesfor day one November delivery averaged in the low-$2.80s, 15 centsless than prompt month futures. But cash prices were not solely toblame for the lack of a bounce Friday. In an attempt to pick abottom, a number of traders were buyers on the move lower, onetrader said. As prices continued lower Thursday afternoon andFriday morning those longs were forced to sell off or risk furtherlosses. “In fact, the move down to $2.87 was made possible by alarge bank that was forced to cover a large trade-paper stop,” hesaid.

For another risk manager, last week’s slide was just business asusual. “Historically, Sep. 15 to Nov. 15 is the time that youtypically extract a large chunk of value out of the 12-month strip.What we saw [last week] was just stage 1. [This market] probablyhas one or two more moves like that one left in it,” he reasoned.Further losses, however, will not be a straight line as the marketcontinues to trade based on the short and medium term forecasts.”We will likely be greeted Monday morning by a favorable 3-5 dayforecast, which should show a cold front moving through the Midwestfrom west to east. That should give us a little bounce to start theweek. But, unless we get an Arctic cold front, you had better sellthe rallies,” he said.

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