Cents

It was a tale of two cash markets on Friday, as the majority ofprice points east of the Rockies registered gains of 1 to 7 cents,while prices to the West dropped because of the typical weekenddecrease in California power demand exacerbated by a weekendconstraint announced on PG&E’s system. El Paso (non-Bondad) wasone of the pipes to fall the farthest, finishing in the mid $2.20s.

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.

After cascading nearly 15 cents lower Tuesday and Wednesday,natural gas futures rebounded yesterday as traders ignored thebearish technical picture and focused instead on constructivefundamental factors. The August contract slipped at the close, butwas still able to post a 2.1-cent advance for the day to $2.162.

After watching the market free-fall 7.1 cents to kick off theweek, bulls dug in their heels Tuesday at Nymex. While they weren’table to recoup much of Monday’s declines, they did prevent anyfurther losses. As a result, the futures market was stagnantyesterday, with the July contract limited to an extremely tight3-cent trading range before settling up 0.1 at $2.238.

After spiking as much as 7 cents higher in the Wednesday eveningAccess session, the new prompt month was the focus of muchconjecture and speculation. Would June continue higher, followingthe example set by May, or fall from its already lofty perch? Formany, it is still too early to tell, but if yesterday’s priceaction was any indication, June will have a difficult time matchingMay’s 50-cent price increase over the past month. After opening at$2.40, the June contract tumbled throughout the session to close at$2.339, a 0.2-cent decline from Wednesday’s close.

For the second Monday in a row the futures market kicked off theweek with a lower open, which featured bears as the earlyaggressors. That, however, is where the similarities between thetwo weeks ended. Whereas prices continued down the slippery slopelast Monday, yesterday’s trend was almost a straight line higher.Sources said a number of factors-technical short-covering,supportive weather forecasts and even a boost from the nearby crudeoil trading pit-were reasons for the 7-cent gain to $1.769 in Aprilfutures yesterday.

The August natural gas futures contract slipped 1.1 cents to$2.439 Thursday, as traders scrambled to finish their businessahead of the long fourth-of-July weekend. “Today was pretty muchjust position covering ahead of the weekend,” a broker told GPI. “Idon’t think anyone was too concerned with, or had the goal of,moving August outside of its trading range,” he said. For thatreason, he was not surprised to see technical support at $2.38hold.

The August Nymex contract fell 3.4 cents to $2.389 on Monday,amid a day when an extremely light 22,000 estimated total contractschanged hands. “We went from 123,000 contracts on Friday to almostnothing today. There just ain’t nothing going on,” a traderlamented. The fourth-of-July is typically among the lowest demandperiods of the year, and because the holiday falls so close to thefirst of the month, many cash market traders termed up incrementalgas through July 7th during bidweek, several sources reported. As aresult, the Merc pit lacked solid participation from commercials,and a broker expects that to continue throughout the week.

$2.40 gas proved to be too much for July on Wednesday, as thespot futures contract fell 5.5 cents to settle the day at $2.336.July opened at $2.41, but that turned out to be its high trade forthe day as sellers were quick to liquidate positions and takeprofits ahead of the contract’s expiration this Friday.