Amid

As many traders predicted, the futures market continued lowerThursday morning amid a swirl of bearish fundamental factors, whichwere freshly updated Wednesday evening. But the dip wasshort-lived, and afternoon buying bid the spot January contractback up to test resistance, before settling at $1.84, off 0.7 centsfor the day.

Late-November price softness showed little sign of abating inpost-weekend activity Monday, and except for residents of theNorthwest and Upper Plains enduring somewhat nasty weather, thereason was apparent to anybody who went outdoors. Temperaturesapproaching the Thanksgiving holiday are unseasonably mild for thegreat majority of the U.S., and the lack of load combined with theearly stages of storage withdrawal season were depressing both cashand futures numbers. Quotes were mostly flat for the SouthernCalifornia border and TCO; otherwise price declines tended to rangefrom about a nickel to more than a dime.

As most players expected for Thursday’s cash market, gas pricestumbled across the board amid moderating temperatures throughoutmajor markets nationwide. Cash prices fell about a dime on averageat most trading points.

The futures market spiked higher Monday in response to thethreat to natural gas supplies in the Gulf of Mexico posed byHurricane Mitch. There was an early buying surge as non-commericaltraders struggled to close out short positions ahead of the rally.However, once the market started its momentum, buying came from allsegments of the market. The November contract settled up 13.4 centsto $2.298.

Lack of follow-through selling kept the bears guessing yesterdayat Nymex as the market ignored a trio of bearish factors-weather,storage, and cash prices-to trade nearly unchanged on the day. TheNovember contract was limited to a tight trading range and settleddown just 0.4 cents to $2.176 for the day. Estimated volume was43,394.

Technical factors exert their influence on the natural gasmarket on a daily basis, confounding some traders while rewardingothers. Sometimes technicals are in agreement with underlyingfundamentals as was the case throughout the month of September,when supply tightness met with chart patterns and trend lines thatwere flashing buy signals. The end result: a rally that lifted theOctober contract 40 cents for the month. But, oftentimes thesefactors are not in concert, and trading thus far in October hasbeen just that. Whereas storm-related supply shut-ins supported themarket in September, October has been relatively free of supplydisruptions. That, coupled with U.S. storage inventories nearlyfull, has created an oversupply situation which has weighed onprices most of the month.

The futures market followed an early example set by the cashmarket on Tuesday, as early selling fueled by losses in Monday’sAccess trading pushed the market lower for the second day in row.That enabled the November contract to not only gap lower at theopen, but also to gap below key support at $2.35 on its way to alow of $2.295. However, the buyers saw good value at those levelsand bid up the contract to its settle at $2.346, a 4.7 cent lossfor the day.

Lacking any impetus from fundamentals or a sedate futuresscreen, the vast majority of points settled down for a level ridein a quiet market Wednesday. The few increases of any size occurredin the Rockies and California and were attributed to supplyconstraints and continuing heavy air conditioning load.

A casual glance at the futures table — its narrow trading rangeand its small daily change — would lead one to believe Wednesdaywas a relatively quiet expiration day at Nymex, during which theAugust contract was ushered off the board at $1.942. ButWednesday’s trading was anything but ordinary. Traders wereinundated by a host of technical and fundamental factors, leadingto “very choppy” trading and heavy volume of 116,428.