Most cash points rose 1 to 5 cents yesterday on the strength ofa futures rally fired by a bullish American Gas Association storagereport. Traders were in agreement that prices were flat toWednesday until the futures screen picked up in the late morning.
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Bullish Screen Defeats Bearish Weather to Push Cash Higher
The cash market switched gears Tuesday, as gains of 3 to 11cents at most points reversed a two-day trend of general weakness.A strengthening futures screen replaced the slackening powergeneration demand as the main market driver, one trader said, andthe result was increasing gas prices despite moderatingtemperatures throughout the nation.
Futures: What Can’t Go Up Must Come Down
After three consecutive days marked by the bullish pattern ofhigher highs and higher lows, the futures market receded yesterdayon a wave of selling pressure by both commercial and local traders.June wilted into its daily close, tumbling 8.1 cents lower tofinish at $2.262.
Nymex Fall-Off Tempers Bullish Euphoria
It has been a good spring for bull traders at Nymex. SinceFebruary 26, the now-spot June contract has rallied nearly 70 centsto trade as high as $2.40 last week. But just as constructivetechnicals and low storage injection figures seemed to point tocontinued strength, the market spiraled lower Thursday and Friday.And while long liquidation spurred by the bearish one-two combo ofnuclear units coming back on line and moderating temperaturesacross the country were as good as reasons as any for the marketturning lower, traders remain divided as to the price directionheading into the summer. June finished the week mixed at $2.273, 2pennies above its close from the prior Friday, but 2.2 cents lowerfor the day.
Futures Shrug Off Storage Report Again
For the second straight Thursday, natural gas traders ignored aseemingly bullish American Gas Association storage report bypressuring the market lower in light, long liquidation. The Junecontract was the hardest hit by the sell-off, slipping 6.4 cents to$2.295 in active trading.
Bearish Results do not Hinder Bullish Outlook
Normalizing weather caused cash prices at most points to drop afew cents to nearly a dime yesterday with the Chicago pointsaccruing the largest losses, but the downturn failed to abatemarketers’ optimism, which was buoyed by a new six- to 10-dayforecast calling for below-normal temperatures for a large portionof the nation.
Weekend Prices Maintain Bullish Trend
The drop in gas load that usually accompanies a weekendreduction of business activity failed to dampen the cash market’sbullishness Friday. Though a few points (El Paso-Permian andTrunkline-South Texas) eked out only penny upticks and CIG and Wahawere essentially flat, most markets achieved gains of 3-7 cents.Influencing factors were unchanged from earlier in the week,sources said: Western cold, Southern heat, a higher screen andelectric utilities using gas in peaking units while many nuclearand coal plants are down for refueling or other maintenance.
Coastal CEO Bullish on Gas
Think anything but gas is the way to go for the energyindustry’s future? Forget about it. Gas is where it’s at and whereit will continue to be for some time, Coastal CEO David Arledgetold a room full of producers in Houston at the Texas IndependentProducers & Royalty Owners Association’s (TIPRO) Tuesdayluncheon yesterday.
Duke CA Plants to Get Big Ticket Makeover
The bullish prospects for natural gas-fired power generation andthe robust market developing in the merchant plant sector were bothunderscored last week by Duke Energy Power Services’ plans toinvest $700 million in state-of-the-art gas-fired units at two ofits recently purchased merchant sites in California.
3.1 Tcf Storage Level Not a Problem for Bulls
A strong cash market and a shift in attention from the bearishsupply situation to the bullish demand forecasts collaboratedThursday to send futures prices spiraling higher. That enabled theDecember contract to move through a couple of key chart levels enroute to its settlement of $2.553. Estimated volume, which has beennotably less than usual this week, registered a respectable 88,159.