Amid

The cash market was doing a skyrocket imitation Monday amidsignificant fundamental influences, along with a large dose ofsupport from both natural gas and oil futures. Only a fewRockies/Pacific Northwest and Western Canada points failed to riseby about 20 cents or more (MRT and ANR ML-7 were among theexceptions elsewhere).

After putting in a price bottom at the end of July, natural gasfutures have moved steadily higher throughout the month of Augustas traders priced a hurricane premium into the market. Theirconcern is that a supply disruption in a market that already sportsa tight supply-demand equilibrium could mean serious problemsheading into the crucial winter demand months.

After beginning last week amid some excitement caused by theadvent of genuine hurricane activity in the Atlantic, the marketwent into the weekend on a generally quiet note Friday. Nearly allGulf Coast and Midcontinent/Midwest points were flat, but Northeastcitygates and California saw small declines and most Rockies pipesfell by 15 or more cents.

With the conspicuous exception of San Juan Basin, pricescontinued to rise by about a dime or more at most points Thursday.While still firming, the market’s increases were smaller than thoseon Wednesday.

It was only fitting yesterday that the futures market groundlower amid lack of strong fundamentals. After all, Monday was theconclusion of just the second July in the last 100 years in whichNew York City did not reach 90 degrees Fahrenheit. Even WashingtonD.C., which is known for its mostly intolerable summer heat andhumidity was limited to just one day of 90-plus mercury during themonth.

Fueled by strength in the overnight Access trading session,natural gas prices moved higher Friday morning as traders coveredshort positions acquired during the market’s 30-cent move lowerlast week. However, after peaking at $3.93 in the first hour oftrading, the bears went back to work and were ultimately successfulpushing the market lower on the day. The August contract finishedthe session down 2.6 cents at $3.834 in a session that saw anextremely-light, 48,413 contracts change hands.

The price see-saw continued yesterday in the natural gas pit atNymex as traders made quick work of Tuesday’s advance with a latesession sell-off. The August contract was dealt the most severeblow, tumbling 16 cents to finish at $3.884. Estimated volume wasmoderate, with 71,148 contracts changing hands.

Less than 24 hours after posting a new all-time high for aprompt month, the July contract was hit with massive longliquidation that sent the expiring contract 31.7 cents loweryesterday to $4.369.

Feeding off gains notched Friday morning, natural gas futurespushed to fresh highs yesterday as funds and locals added to theirlong holdings. With that, the June contract has advanced 16 centsin the last two trading sessions to move past and settle above itsprevious life-of-contract high with a $3.216 closing price Monday.Estimated volume was light at 51,288 contracts despite theimpressive price move. An average trading day would see roughly20,000 more in estimated volume.