After a one-day breather Friday, the natural gas futures market continued its blistering pace of advance Monday as fund short-covering was augmented by private forecasts suggesting the final 10 days of the month will see another blast of Arctic air. An increase in Nymex margin requirements was also seen as a contributing factor, intensifying the urgency for shorts to cover their positions.
Articles from Bull
Once again Northeast citygates took the lead and the West brought up the rear in Thursday’s across-the-board rebound from softness on Wednesday. Cash relied primarily on prospects of continuing frigid weather for its strength Thursday, but should be able to continue higher Friday due to storage data, spiking futures and an out-of-season tropical storm’s potential for getting into the Gulf of Mexico.
Following Monday’s strong launch, this week’s northern heat-inspired bull market appeared to be running out of steam quickly Tuesday when a moderate bias to the downside dominated an overall leveling off of cash prices. Several scattered small gains were outweighed by flat showings and losses ranging up to nearly 20 cents.
Late-week trading at Nymex has been the a bull’s domain of late and last Friday was no different as natural gas futures continued to feed off the weekly Thursday morning reminder that the industry is facing historically unprecedented low storage levels.
With a neo-ice age descending into the Northeast and Midwest, an overall bull market was to be expected Friday. But there were notable inconsistencies. While most of the Northeast continued to soar, Algonquin citygates and Iroquois Zone 2 took major dives. Outside the Northeast, quotes tended to range from flat to mildly lower in San Juan Basin and the Rockies to up about 30 cents on Dominion in Appalachia.
Northeast citygates were solidly topping $6 Monday while those in the Midwest edged their way above $5 in a continuing show of strength by the cash market. Only the Rockies lagged behind with minuscule gains, while the rest of the market measured its advance in double digits that exceeded 20 cents in most cases and approached a dollar at Transco Zone 6-New York City.
After slowing down considerably on Tuesday, this week’s bull market resumed its headlong charge with the exception of a Rockies retreat that a couple of NGI sources had anticipated. Non-Rockies quotes mostly saw double-digit increases between about a dime and a quarter, with the bigger gains tending to cluster in Appalachia and the Northeast.
The bull market in cash proved to have staying power Thursday, with further advances tending to outstrip those of the day before. Price movement varied widely and inconsistently from slightly higher at several Gulf Coast and Northeast points to as much as about 35 cents higher in the Rockies. A continuation of cold weather throughout the North and much of the West was credited with keeping prices firmer.
As sources had anticipated, Wednesday’s stall in this week’s bull market led to softer prices Thursday. A majority of losses were in the vicinity of a dime, but others ranged from only 1-2 cents down at a couple of Gulf Coast points to a drop of more than 30 cents at Transco’s Zone 6-NYC.