Await

Ending a three-day, 40-cent price advance, natural gas futures sifted lower Tuesday, as trade selling overpowered fund short covering. Negating Monday’s advance with a 12.6-cent decline, the November contract fell throughout the session to close even with Friday’s $2.681 settle.

Following Monday’s 8% price erosion and ahead of July expiration today, natural gas traders adopted a wait-and-see approach Tuesday, as light buying was slightly overpowered by continued short selling. At the closing bell, the July contract was 4.9 cents weaker at $3.397. Volume was light for a penultimate trading day with only 82,002 contracts changing hands.

Tuesdays have been a natural gas bull’s savior as of late. Making it three in a row, futures rebounded yesterday as traders once again were in a buying mood ahead of Wednesday’s weekly storage report. Fighting against a gap lower open and a quick move down to $4.05, buyers stepped up their efforts mid-morning and watched as prices bubbled higher throughout much of the rest of the session. Although small, the one-cent advance leading to yesterday’s $4.123 closing price was claimed as a victory by bulls who have found little to like about this market thus far in 2001.

Alleviating oversold conditions created on the move lower over the past couple weeks, natural gas futures rebounded strongly Tuesday, as traders covered shorts amid undeniably bullish technical conditions. After gapping higher at the open, a steady flow of buying propelled the market to its highest level since May 1. At the closing bell, June was 25.9 cents higher at $4.653.

Not all the action in Canadian natural gas fits the pattern thathas raised concerns over supplies for the next couple of heatingseasons -low-cost prairie drilling for quick hits of small reservesthat deplete rapidly.

A new study by the Interstate Oil and Gas Compact Commissionreports the number of idle gas and oil wells nationwide has jumpedby more than 58,000 in four years to 343,030 wells in 2000, whichillustrates the impact of low oil and gas prices over the past fewyears and the potential for increased marginal well production overthe next few years.

A new study by the Interstate Oil and Gas Compact Commissionreports the number of idle gas and oil wells nationwide has jumpedby more than 58,000 in four years to 343,030 wells in 2000, whichillustrates the impact of low oil and gas prices over the past fewyears and the potential for increased marginal well production overthe next few years.

State regulators, LDCs, utilities and industry analysts arespringing into action to prepare residential customers for theharsh reality of much higher natural gas bills next winter,especially if power generation demand for gas continues unabatedand the winter heating season is unusually cold.

The cash market arrested the slide that had been developingTuesday by coming to a near-standstill in price movement Wednesday.Only a few points ranged any further than a penny or so to eitherside of flat.