Bounce

Buoyed largely by “significant asset acquisitions” completed during the past year, Houston-based El Paso Energy Partners LP reported Monday a 77% jump in net income for the third quarter over a year ago. The company said approximately $2.2 million, or five cents per unit, had been shaved from its quarterly earnings due to disruptions caused by Hurricane Isadore and a loss associated with a natural gas hedging transaction.

August futures were able to manage their first higher daily high in six trading sessions and posted an 8.4-cent gain on the day to reach $3.201 at the end of the truncated holiday trading session at Nymex. The increase was expected by many observers as a continuation of the technical correction this week, but, it is less certain where the market goes from here. Bearish fundamentals abound, but technicals indicate the rally could continue into the mid-$3s.

Pressured by a steady stream of local and fund selling, naturalgas futures slid lower yesterday amid an improving winter storageoutlook and continued mild temperatures across the nation. TheNovember contract took it squarely on the chin, dropping 25.2 centsto close at $4.82, almost a dollar below its Oct. 12 high.

Dallas Cowboy fans are not alone. It has been a tough month ofSundays for natural gas bear traders as they have been forced towatch Friday’s downward price momentum gradually lose steam duringSunday evening Access trading, setting the stage for a pricerecovery when the regular open-outcry session re-opens Monday.

Following the lead of both the over-the-counter and cashmarkets, natural gas futures erupted higher yesterday morning astraders covered shorts on the outside possibility that a tropicalstorm might develop in the Gulf of Mexico. The September contractwas the biggest mover, posting an impressive 21.3-cent gain tofinish at $3.987.

Despite an impressive bounce Thursday afternoon and strongerover-the-counter trades Friday morning, natural gas futures werehit with a second day of losses Friday as locals deposited themarket lower after finding an intermediate layer of resistance at$4.16. The July and August contracts moved lower in lockstep, eachshedding 2.1 cents to finish the week at $4.043 and $4.022respectively. Estimated volume was 82,698.

The cash market managed to rebound Monday from the weekend’smild softness, but the bounce back up was small. Monday’s quotesranged from flat to almost a dime higher, with most of the upticksless than a nickel.

Ending a two-day slide, natural gas futures snapped back to lifeFriday as traders were drawn back to the long side of the market bysupportive technicals and stronger weekend cash prices. In just itssecond day as the prompt contract, May advanced 7.2 cents to finishat $2.945, just a penny off its high for the day and just 6 centsof its all-time high notched last Tuesday.

Y2K was not an issue yesterday for traders in the natural gaspit at the New York Mercantile Exchange as they seamlessly made theswitch from the December 1999 contract to the January 2000contract. They did, however, have some unfinished business to takecare of. After opening at $2.33, January rumbled 9 cents higher tofill in the chart gap created by December, between the Nov. 19 lowof $2.39 and the Nov. 22 high of $2.35. But before any talk of asustained rally could circulate-bears, armed with fresh forecastscalling for above-normal temperatures-were successful in all butcompletely erasing those early morning gains. At the closing bellthe January contract was up just 2.2 cents to finish at $2.352.