Advance

Buoyed by a supportive short-term weather outlook and another impressive advance in the nearby crude oil market, natural gas futures surged Monday on a combination of speculative short-covering and commercial trader buying.

In a variation of the springtime weather idiom, it was the April futures contract that came in like a lion this year. Following March’s lamb-like behavior as prompt contract, trading roared back to life Thursday and Friday as buyers bid up April futures on the bullish combination of storage and technicals.

After gapping higher at the opening bell, the natural gas futures market spent Tuesday’s trading session in a methodical downward slog. With that the February contract completed its penultimate trading session at $5.716, down 1.1 cents for the day and 16.4 cents off its early-session high. The contract is set to expire at 2:30 p.m. EST Wednesday.

Ending a seven-session price advance, natural gas futures dropped lower at the opening bell Monday as traders alleviated overbought conditions and cashed in on a portion of recent gains. After that initial wave of weakness, however, the market steadied itself, giving buyers the opportunity to chip away at the deficit for the remainder of the day.

In reaction to mounting bullish pressure and in agreement with its seasonal tendency to rally in October, the natural gas futures market soared Tuesday amid waves of managed fund short-covering.

PSI Energy has filed an application at the Indiana Utility Regulatory Commission (IURC) for a generic certificate of need that would allow the Cinergy subsidiary to purchase unidentified generating assets “within certain approved parameters,” a PSI spokesperson told NGI last Tuesday.

Natural gas futures ended higher for the second session in a row Wednesday as buyers continued to take advantage of the lowest prices thus far this year. The October contract received the biggest boost, gaining 7.1 cents to close at $4.788. The prompt September contract followed suit, advancing 6.8 cents to finish at $4.745. At 40,761 estimated volume was light, an indication that traders are waiting on the sidelines ahead of Thursday’s storage report.

Adding to strength experienced in the overnight access trading session, natural gas futures galloped higher Monday as short-covering made a indelible imprint on a market otherwise devoid of much trading liquidity. After gapping higher at the opening bell, the prompt June contract received a boost by supportive technical features as well as reports of nuclear unit problems. It closed at $5.689, up 43.4 cents for the session.

Adding to Tuesday’s modest price advance, natural gas futures surged higher Wednesday as early morning commercial buying triggered local short-covering at midday. Buying was almost uniform across the 12-month strip, suggesting hedging activity by end-users who may have missed their opportunity the last time prices were near $5.25. June futures closed at $5.385, up 14.9 cents for the session. The 12-month strip, meanwhile, outperformed the prompt month, advancing 15.1 cents to $5.446.