Choppy

Choppy trading continued in the natural gas pit yesterday astraders deposited prices lower, after failing to break throughoverhead resistance on the open. However, after watching pricesrumble mostly sideways for the better part of the afternoon, bullswere once again on the offensive Tuesday evening in reaction toreports that a storm was forming in the western Caribbean Sea.

Despite an impressive bounce Thursday afternoon and strongerover-the-counter trades Friday morning, natural gas futures werehit with a second day of losses Friday as locals deposited themarket lower after finding an intermediate layer of resistance at$4.16. The July and August contracts moved lower in lockstep, eachshedding 2.1 cents to finish the week at $4.043 and $4.022respectively. Estimated volume was 82,698.

Even an abbreviated pre-holiday trading session at the New YorkMercantile Exchange gave traders no rest last Friday as the marketclawed its way higher from a “disappointing” open only to reverseright back down at the close. When all the dust had settled and theorders were tabulated, the March contract was off 3.4 cents for theday at $2.633.

Price points throughout the country varied in their responses toweather forecasts, the American Gas Association storage reportexpectations, and a rising futures screen yesterday. Despite thelack of direction, many traders agreed that weather, which wasresponsible for significant increases in the East and Midcontinentearlier in the week, is set to regain its leadership role in themarket, and push prices down heading into the weekend.

Buoyed by another day of strong demand in the physical market,the futures market trended higher Friday in a choppy, range-boundtrading session. After opening just two pennies above Thursday’slow of $2.67, the September contract rumbled 2.2 cents higher onthe day to finish at $2.745.

After a choppy week of range-bound trading, bulls foundthemselves in the driver’s seat Friday at the New York MercantileExchange when weather forecasts and technical factors came intoagreement. Given the opportunity it didn’t take long forspeculators, comprised mostly of local traders, to become buyers inan attempt to push the August contract through resistance tobuy-stop orders that they knew were waiting in the $2.21-22 area.However, what they failed to realize was that there wasconsiderable commercial selling waiting there as well, it proved tobe more than enough to satiate the buying demand. The Augustcontract notched a $2.225 high shortly after 1 p.m. (EST) only tocome crashing back to settle at $2.187, an 0.8-cent advance for thesession.

After a hectic trading week that saw the June contract tradewithin a choppy, 15-cent range, traders tiptoed through Friday’snatural gas session. A late rally and retreat right before theclose of trading was the only real excitement in an otherwisefeatureless trading landscape. The June contract finished at$2.288, up 0.6 cents for the day and 1.5 cents for the week.

Adding to gains achieved in the Monday evening Access tradingsession, the May contract continued higher yesterday morning asbulls confidently bolstered their long positions. However, recentgains notched by natural gas have not come without a fight andTuesday was no different. After topping out at $2.17, the promptmonth reversed direction in the afternoon, nearly erasing itsadvance by the close. May finished at $2.136, up 0.8 cents on theday.

Trading at the New York Mercantile Exchange for the month ofFebruary has featured tight but choppy ranges punctuated by smalldecreases when sellers slightly outnumbered the buyers in themarket. And yesterday’s expiration-day session was simply amicrocosm of that as the March contract was the focus of a fierce,and mostly balanced battle, which was ultimately decided by sellerslate in the day. The March contract concluded its reign as promptmonth with a 4.4-cent decline to settle at $1.666.