Building on modest short-covering related advances achieved Friday, natural gas futures plowed higher yesterday as traders returned to the office to find that meteorologists had not backed away from their forecasts calling for hot temperatures across an extended area of the country over the next 10 days. With that, the September contract took over as the prompt month at Nymex with a neat, 15.9-cent gain to close at $3.353.
Advances
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Extra Heat, Screen Propel Small Cash Advances
Bolstered by the return of hotter weather to some regions and a screen gain of nearly a dime, nearly all points ranged from flat to about a nickel higher Tuesday. A PG&E citygate gain of slightly more than 15 cents, coupled with declines of about a dime at Malin and about 25 cents at Southern Border into PG&E, were the primary exceptions to mild firmness.
Technical Sell-Off Erodes Recent Futures Advances
Like an old wooden roller coaster that ratchets its way to the top only to plunge back to earth in a matter of seconds, natural gas futures free-fell yesterday, as traders liquidated weak length acquired over the last several weeks. The gut-wrenching session left the prompt May contract 26.8 cents lower at $5.248.
With Eye On Storage, Traders Rescind Early Advances
Eroding gains achieved in the overnight Access trading session, natural gas futures trickled lower Tuesday as neither bull nor bear was willing or able to propel the May contract outside of its recent trading range. Closing at $5.115, the May contract finished 5.5 cents off its opening trade, but 1.2 cents above Monday’s settle.
Hurricane Hype on Hold, Monday is True to Form
Breaking its string of days with advances at nine, the naturalgas futures market sifted lower yesterday as traders learned that atropical storm they had been watching on Friday would likely not bea threat to gas production in the Gulf of Mexico. The prompt monthtook the news on the chin, tumbling 15.7 cents to finish at $4.318.Estimated volume confirmed the move, with 37,472 contracts changinghands.
Quarter-Plus Advances Saturate Cash Pricing
Wednesday’s cash market gains got even bigger Thursday asfutures continued to lend support. Virtually all gains were about aquarter or more, with the larger ones of more than 30 centsclustered mainly in the West. Malin led the pack by advancingslightly more than 40 cents.
Technically-Induced Profit Taking Trims Recent Advances
Following a 4-day, 20-cent price rally, bulls in the natural gaspit cooled their heels yesterday as traders took profits amid ahost of negative short-term technical factors. After peaking forthe day shortly after 11:00 A.M. (CST) at $3.165, selling hit themarket in two distinct waves. It was the second thrust that pushedMay below key support at $3.10 to settle at $3.098, down 6 centsfor the session.
Merchant Power Rules, Prices to Keep Changing
The right price signals and eventual resulting technologicaladvances are going to be needed to stimulate the number of naturalgas-fired merchant power plants needed over the next 10 years tosatisfy the projected growth in energy requirements, according to aReliant Energy executive. However, actions on both coasts(California and New York) have cast doubts on whether sufficientincentives will fully develop.
Futures Etch New Highs; More Volatility Expected Today
Feeding off Monday’s late-day advances, natural gas futurescontinued higher yesterday as traders covered short positions andnotched new longs amid a freshly bullish technical outlook. Theprompt April contract posted new life-of-contract highs for thesecond day in a row, advancing 4.9 cents to finish at $2.963.Somewhat less impressive were the out months, led by May, June,July and August, each of which gained 3.3 cents.
Futures Retrace Earlier Advances
Taking a cue from Wednesday’s Access trading session, thefutures market probed lower yesterday as weak longs and speculatorstook profits away from the price rally earlier this week. TheNovember contract was dealt the largest blow, slipping 13.6 centsto finish at $2.834. December closely followed by tumbling 10.8cents to $3.051.