Broke

December natural gas futures on Tuesday broke above the psychological $8 level once again Tuesday, but like other recent sessions, the contract was unable to make it stick. After reaching a high of $8.220 on the day, the prompt month trickled lower to close at $7.977, up 8.3 cents.

Three days after news broke that hedge fund Amaranth Advisors LLC lost a significant portion of its net asset value in the natural gas futures market, the company’s founder late Wednesday updated investors on the size of the fund’s losses while reporting that the gas trading book had been sold to third parties. There were also reports Wednesday and Thursday that Citigroup — the largest U.S. bank — was interested in purchasing a stake in Amaranth, but the company declined comment.

The world’s largest public oil company raked in second-quarter profits commensurate with its size. Exxon Mobil Corp., broke its own quarterly earnings record (see Daily GPI, April 28) in 2Q 2006, reporting net income of $10.36 billion, $1.72/share, an increase of $2.72 billion from the second quarter of 2005. First half net income of $18.76 billion, $3.09/share, increased by 21% versus first-half 2005.

With the realization that natural gas storage levels are likely to be at record or near-record levels this summer, natural gas futures on Friday finally broke through long-standing support in the $6.450 to $6.500 area while putting in a new low for the greater down move. June natural gas recorded a low of $6.225 before closing out the week at $6.280, down 36.9 cents on the day and 49.5 cents lower for the week.

As news broke over the weekend that a former Enron lawyer has been hired at FERC as a trial attorney specializing in technical rate matters, a Commission spokesperson on Monday urged skeptics to “look at the facts,” and not to attach a “stigma affecting someone’s career just because of the simple fact they worked at Enron.”

March natural gas broke its streak of eight consecutive regular sessions lower on Thursday, testing the $7 level again before rallying higher to close at $7.134, up 6.8 cents on the day. The Energy Information Administration (EIA) reported Thursday that 102 Bcf was withdrawn from underground stores for the week ended Feb. 10. The number, which was closer to historical analogs than other recent weekly withdrawals, was still short of the industry’s expectations.

After being stuck within an $11.030 to $12.070 range for 11 consecutive regular sessions, December natural gas broke to the upside Wednesday as a cold front reached the East and petroleum futures prices recorded significant gains. December natural gas ended up settling at $12.329, up 76.6 cents from Tuesday’s close.

After trading mostly sideways for the past 11 sessions in a range from $6.875 to $6.31, May natural gas — with help from the petroleum futures complex — broke more than 40 cents lower in two separate waves of trading on expiration day Wednesday before going off the board at $6.748, a whopping 37.2 cents below Tuesday’s settle.

After trading lower in the overnight Access trading session, May natural gas futures broke down to a low of $7.02 in trading on Tuesday afternoon. However, the May contract, which expires on Wednesday, rebounded in the afternoon to settle at $7.12, down 3.3 cents on the session but just 1.5 cents less than the high for the day.