Choppy

Natural gas futures at the New York Mercantile Exchange haveconsistently featured choppy trading, high daily volatility, andprice erosion for the last several months. And expiration dayTuesday was no different as traders tested both sides of a largetrading range before depositing the January contract 2.3 centslower to its final resting place at $1.765. And in doing so, theJanuary contract tumbled over a half dollar during its reign as theprompt month.

Trading at Nymex yesterday continued in the choppy, range-boundmanor that has plagued the market for most of November. Againtraders lamented the lack of a clear direction or price trend inthe futures pit. The December contract was held to a tight, 6-centtrading range and settled at $2.394 after never fully recoveringfrom a lower opening.

The futures market continued to move in a choppy,sideways-trading pattern Wednesday, as traders tried to influence amove outside Tuesday’s broad trading range. But the Decembercontract could only muster a 6-cent range yesterday, which producedan inside day on daily charts. Trade selling set in as Decemberreached its $2.435 high and pushed the prompt month down to itseventual $2.395 settlement price.

There was no calm before the storm on Thursday as the futuresmarket experienced another day of volatile, choppy trading astraders turned to televisions in trading rooms across the countryfor the direction and strike probabilities of Hurricane Georges.The October contract bounced back and forth throughout the tradingsession as the market digested the imminence of supply shut ins.That prompted the spot month to move 4.8 cents higher yesterday,settling at $2.179.

A casual observer to Friday’s futures market would note themodest 0.7 cent gain registered by the prompt month and conclude itwas a quiet day of position squaring ahead of the weekend. However,trading in the pit was anything but serene as the prompt contractopened below $2.00, tested support from the continuation chart at$1.97, then moved higher looking to fill in a chart gap in the$2.05-09 range. And all that happened before the lunch hour in NewYork. Afternoon trading brought some selling pressure into themarket and July drifted back downward, before settling nearlyunchanged at $2.027 for the day. Estimated volume weighed in at ahefty 57,301 with trading within a 10-cent trading range.