Bullishness

Air conditioners are humming virtually everywhere, and that translated into continuing bullishness for almost the entire cash gas market Wednesday. Except for a small decline at Malin and flat to barely higher numbers at a few Northeast citygates, other points saw gains that tended to range from a nickel to a little more than 15 cents.

The cash market remained on its uphill trek at all points Wednesday except for the OFO-devastated PG&E citygate, but price increases continued to get smaller than those earlier in the week. A substantial majority of upticks were between 10 and 20 cents.

Buoyed by technical bullishness, combined with strong buyinginterest in the summer months, natural gas futures moved higherWednesday as buyers focused their buying not only on the promptmonth but also on the bargain-priced summer strip. The Marchcontract finished at $6.235, its 47.1-cent gain narrowly surpassingthe 37.5 advance achieved by the April-October strip.

In a somewhat stunning show of bullishness, natural gas futuresprobed higher yesterday as funds and locals followed the lead ofcommercial buying throughout the last hour of trading. On its firstday in the limelight, the new prompt month, October, received thelargest boost of any contract at Nymex, leaping 15.8 cents higherto close at $4.801. In doing so, it set a new all-time high dailysettlement for a prompt contract.

The bullishness that had been a feature of the cash market sincemidweek slowed down considerably Friday. Most eastern points rangedfrom flat to about a nickel higher, while several Northeastcitygates joined the Rockies and Southern California border insmall declines.

Those who had expected cash bullishness to continue Wednesday,based on the July futures contract’s move to previously unknownheights on the previous day, were in for a big disappointment.Wednesday’s screen achieved most of its drastic downturn while cashwas still trading. And while hot weather remained fairly severe onthe West Coast, it cooled off considerably in the Northeast.

As might be expected at a Calgary conference where producersdominated attendance and the first day’s panels, bullishness onfuture gas prices ran rampant despite last week’s price slump.Emphasizing the challenges and opportunities in reaching aprojected 30 Tcf/year market by the 2010s, speakers at Ziff EnergyGroup’s North American Gas Strategies conference agreed thatCanadian gas is well positioned to benefit both volume-wise andprice-wise in the coming years.

As might be expected at a Calgary conference where producersdominated attendance and the first day’s panels, bullishness onfuture gas prices ran rampant despite the current week’s slump.Emphasizing the challenges and opportunities in reaching aprojected 30 Tcf/year market by the 2010s, speakers at Ziff EnergyGroup’s “North American Gas Strategies” conference agreed Mondaythat Canadian gas is well positioned to benefit both volume-wiseand price-wise in the coming years.

Thursday’s trading confirmed the signs from Wednesday that therecent bullishness in swing prices had reached a peak. Although afew points were flat to 2-3 cents higher Thursday, the majorityfell by several cents, with the greatest weakness occurring in theMidcontinent/Midwest and Southwest markets. Cash anticipated afutures downswing and beat the screen to the punch by starting tosoften earlier, a Midcontinent marketer said, although Nymextraders eventually wound up the day with a small gain.