Natural gas futures looked poised to continue to trend lowerlast Friday amid abundant physical supply and having justreestablished the downtrend that began on April 8th. However,weather forecasts calling for the warmest temperatures of thesummer and solid “bargain buying” in the cash market was enough tolift August 3.3 cents to settle at $2.165.
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Futures Traders Expect A Weak Volume Week
The August Nymex contract fell 3.4 cents to $2.389 on Monday,amid a day when an extremely light 22,000 estimated total contractschanged hands. “We went from 123,000 contracts on Friday to almostnothing today. There just ain’t nothing going on,” a traderlamented. The fourth-of-July is typically among the lowest demandperiods of the year, and because the holiday falls so close to thefirst of the month, many cash market traders termed up incrementalgas through July 7th during bidweek, several sources reported. As aresult, the Merc pit lacked solid participation from commercials,and a broker expects that to continue throughout the week.
July Founders Amid Storage ‘Glut’
After posting losses in the Tuesday evening Access session, theJuly Nymex contract gapped lower on the open yesterday, thencontinued to falter closing at $2.106, down a nickel. The contractwas held within a tight 4 cent range between $2.095-135 whichalmost identically mirrored Henry Hub cash prices on the day.Estimated volume was 41,493
June Futures Held To Three-Cent Trading Range
The June Nymex futures contract kicked up 2.0 cents to $2.169 onWednesday, amid a relatively light trading session and an extremelylimited three-cent trading range. Estimated volume came in at amere 43,390 contracts. “Trading was extremely orderly today,” abroker reported. “There was no real panic. Most of the volume wasEFPs and spreads today, with very little outright trading.” Hethinks part of the reason why speculative activity was limited isthat a satellite which transmits Nymex data to several vendors wasapparently down yesterday, and that prevented traders from gettingnecessary real-time price information.
June Futures Hold to Their Mid-Range
Amid a day one broker called “perhaps the most boring of any Iremember,” the spot June NYMEX contract nudged 0.4 cents lower tosettle at $2.200. The broker actually said the day was interestingin that a large amount of anticipated activity never materialized.”Every floor trader we spoke to expected when June broke below$2.18, tons of sell stops would kick in between $2.15-17. But therewasn’t diddly squat for stops. In fact, just the opposite happenedin that there was pretty good scaled-down buying once June hit$2.15,” he said.
EnergyOne Rethinks Strategy Amid Competition Lag
Disappointment with the development of retail gas and powermarket competition nationwide prompted another major player toannounce it is rethinking its plans and redirecting marketingefforts. EnergyOne LLC, the 50-50 marketing alliance of UtiliCorpUnited and Peco Energy, is being restructured in order to implementnew joint strategies tailored to deal with “a competitivemarketplace that refuses to show up,” the partners said yesterday.Their announcement follows by only a week Enron’s statement that itis ceasing residential marketing efforts in several states becausecompetition has been so slow to develop.
Cash Prices Off to Dull Start Amid Light Activity
Lack of activity was the popular excuse for the mostly stagnantprice levels during Monday’s cash market trading session. Mostsources agreed that moderating temperatures along with aslow-moving Nymex screen were to blame. With the exception of theRockies and intra-Alberta gas, which registered the only notabledeclines of the day, cash prices generally started the new weekflat to up or down a penny or two across the board.
Futures Traders End Week With Little Fanfare
The May Nymex contract nudged 0.4 cents lower to $2.475 Friday,amid a day when the contract could neither sustain a move belowtechnical support at $2.44 nor rise any higher than $2.498. Totalestimated volume came in at 46,216, much of which was the work oftraders covering positions before the weekend, a source said.
May Futures Inch Higher Amid Dull Session
The May Nymex contract continued to slowly rebound from itsmassive price downturn on Monday by closing Wednesday up another2.0 cents at $2.521. Trading was held to an extremely tight range,as the spot month could only post a high of $2.555. Total volumewas estimated at 255,671 contracts.
May Futures Trading Starts The Week On a Slow Note
The May Nymex contract nudged 2.1 cents lower to $2.535 Mondayamid a session marked by a relatively light total estimated volumefigure of just over 30,000 contracts. “Many traders are waiting fordirection from the cash market, and since that hardly moved today,it makes sense futures hardly budged either,” an analyst told GPI.