Beneath

After teeter-tottering above and below the $7 mark for the past two sessions, May natural gas futures on Friday once again broke beneath the psychological level to settle at $6.997, down 7.2 cents on the day and 24.5 cents lower for the week.

After gapping lower at the open further beneath the psychological $7 level, November natural gas futures spent Tuesday’s session exploring even lower. The prompt month bottomed out at $6.61 before settling at $6.636, down 35.7 cents on the day.

After tumbling beneath key support, the natural gas futures market broke to new two month lows late Thursday morning as traders chose to ignore a seemingly bullish gas storage report (featuring a 236 Bcf withdrawal). However, prices rebounded in the afternoon, suggesting a short-term bottom may be in place. The May contract finished at $5.40, down 25.4 cents for the session, but up an impressive 15 cents above its earlier low.

After failing to break to beneath pivotal support etched last Wednesday, natural gas futures rocketed higher Monday as commercial traders greeted the return of hot temperatures, and non-commercial traders rushed to cover shorts. The September contract was the biggest beneficiary of the buying surge, closing 20.4 cents higher at $2.965. Estimated volume across all months was moderate, with an estimated 81,811 contracts changing hands.

Exploration partners Anadarko Petroleum and Phillips Alaska bought up the most tracts in the Bureau of Land Management’s second lease sale since the United States resumed leasing in the Alaska National Petroleum Reserve (NPR-A) three years ago. The two companies, which have been most active in the reserve, are expected to be awarded 34 tracts with winning bids of $9.6 million. The entire lease sale generated winning bids totaling $63.8 million for 60 tracts covering 579,269 acres.

Dropping beneath $4.00 for the first time since early August, natural gas futures continued on the slippery slope downward Friday as traders pressured the market lower for the third straight day. With Friday’s 8.1-cent decline and $3.973 close, the June contract has tumbled 96.7 cents since becoming spot contract at Nymex a month ago. June expires at 3:10 p.m. (EDT) today.

After failing for the third day in a row to sustain a move beneath $4.20, natural gas futures rallied yesterday as traders began to cover shorts initiated during the recent price erosion. At the closing bell, the June contract was 14.6 cents higher at $4.348.

After thrice testing, but failing to break beneath support Thursday, natural gas futures rebounded at the New York Mercantile Exchange as traders put an end to a nine-day, 70-cent price slide. The June contract received the biggest buying boost, closing 4.4 cents higher at $4.527.

Lehman Brothers confirmed Friday that beneath the hefty first quarter earnings for oil and gas companies a more compelling tale is unfolding as both majors and independents operating in North America benefit from the move to the drill bit. Production numbers are mixed, but many report that production is up significantly — and some predict the best is yet to come.