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Strong Finish Gives Bulls Another Chance at $4.60
With all the trajectory of a risk manager tethered to abungee-cord and thrust out of a Houston skyscraper, natural gasprices dove then rebounded Monday as traders digested fresh weatherforecasts.
In what appeared at first to be a re-run of last Monday’s42-cent price erosion, the July contract gapped lower at the openyesterday and quickly tumbled 13 cents to $4.31. However, thatwould turn out to be the extent of the price decline, and no soonerhad downward momentum stalled, then bargain-hunters drove the priceright back up. The prompt month easily filled in the $4.39-395chart gap to finish the session with an impressive 11.2-cent gainat $4.56-the highest closing price for a natural gas promptcontract ever.
Traders were quick to cite cooler weather and weaker cash pricesas primary reasons for the move lower yesterday morning. NGI’sHenry Hub average for today is $4.37, off 4 cents from the weekend.However, after fresh weather forecasts began to trickle intotrading floors across the country, the market was quick to recover,traders agreed.
According to the National Weather Service latest six- to 10-dayforecast, above-normal temperatures are expected from the southernRockies to the Southeast U.S. Within that large area ofabove-average readings, the NWS predicts much-above normaltemperatures in the eastern half of Texas.
Looking ahead, traders expect more volatility for the expirationof options and futures today and Wednesday respectively. Inafter-hours Access trading that prediction was already being borneour as the July contract carved a fresh $4.62 high.
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