Bears

Following three straight days of advances the bears reclaimedthe futures market last Friday when early selling pressure piercedthrough several interim levels of support. From that point the routwas on as the February contract plummeted sharply lower inafternoon trading. Only the final bell could halt the decline thatleft the prompt month down 11.4 cent to $1.778.

Bears roamed the gas trading woods in full force Thursday,sending cash prices down by a dime or much more at nearly allpoints. The biggest declines of about 35-45 cents occurred at thepreviously high-flying Transco Zone 6 and Texas Eastern M-3citygates in the Northeast. Although some Zone 6-New York Citydeals were still being quoted above $3, the average there fell intothe mid $2.80s.

Bears had their choice of reasons for continuing to push thefutures market lower Thursday: forecasts calling for warmingweather, an unremarkable storage report, and follow-through sellingpressure. And so when the February contract opened more than anickel below Wednesday’s low, the price rout was on yesterday. Thesell-off sent the prompt month 9.5-cents lower to settle at $1.836.

Plentiful amounts of gas in underground storage and relativelywarm temperatures once again had bears licking their chopsyesterday. But after two attempts failed to push the market lower,short-covering activity propelled the market higher during the lasthour of trading. December posted a 5.2-cent gain to $2.149 Tuesday,and in doing so, became the first contract since March to post again on its last trading day.

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.

Bulls and bears took turns influencing futures yesterday as themarket trended higher throughout regular pit trading, only to dropright back down to near unchanged in last night’s Access session.As is the case on any Wednesday, the price catalyst came in theform of the weekly AGA storage report released at the beginning ofAccess trading. The November contract experienced the largest priceswings of the strip, settling up 4.7 cents to $2.393 beforeretracing 3.3 cents lower to $2.36.

No news was good news on Monday – at least to the bears – as themarket continued to take back gains registered last week in frantichurricane-related trading. That prompted the October contract todrop 7.3 cents to settle at $2.187 yesterday as traders searchedfor any indication that Hurricane Georges (pronounced ZHORZH) wouldaffect natural gas interests in the Gulf of Mexico.

“Fundamentals are bearish, technicals are bullish, and today[Tuesday] the bulls beat the [socks off] of the bears.” Rather thandescribing a pro sports encounter between two Chicago teams, aHouston-based aggregator was summing up his view of the physicaland futures gas markets. Led by a soaring screen that dazzledobservers with its pyrotechnics (“this is crazy,” exclaimed onemarketer), cash prices were rising by a dime or more at nearly allpoints in the face of continuing widespread mild temperatures.

The bears were at it again at Nymex on Tuesday, prompting someanalysts to suggest the downtrend that has weighed on the marketfor over 4 months has resumed. The September contract was thehardest hit by the selling pressure, moving down 5.8 cents to$1.983 on the day.