Cooler

August natural gas is set to open 10 cents lower Monday morning at $4.31 as traders see nothing on the weather horizon to support near-term prices. Overnight oil markets slumped.

April natural gas is set to open 3 cents lower Wednesday morning at $4.38 as traders discount a somewhat cooler, though mixed weather outlook. Overnight oil markets rose.

The cash price rally that began rather timidly at the start of this week continued to gain momentum Wednesday as cooler weather trends manifested themselves in the Midwest and South. Prices rose at all points despite expectations that cold spells going into the weekend would be short-lived.

BP shares in the U.S. market rebounded sharply Thursday as investors who had pushed the panic button Wednesday heeded cooler analytical heads and drove the price up more than 12% at the close from the 14-year low recorded the previous day.

Natural gas futures closed lower Monday after an opening run that took prices to the highest levels in two weeks. Reports of cooler weather in the latter half of the six- to 10-day period aided bulls, but realization of ample supplies quickly tempered their enthusiasm and prices fell. Traders also noted a continued bearish technical environment. The November contract fell 4.5 cents to $6.741 , and the December contract dropped 8.5 cents to $6.991. November crude oil rose $2.40 to $74.25.

Looking beyond what was expected to be relatively mild weekend weather to the return of cooler conditions in the first half of this week in northern market areas, traders moved prices higher Friday at a solid majority of points to get the April aftermarket off to a moderately strong start. However, one source thought buying for storage injections was a more potent factor than temperature forecasts in the overall market strength.

Stock brokers, money managers and wealthy coupon-clippers cried foul, but cooler heads predicted natural gas industry activity and supplies will emerge as winners from a surprise move to tax income trusts by the Canadian government.

Although most points were softer Friday as expected, the market found enough traction from cooler weekend weather in key northern market areas to keep a majority of the losses fairly small, and a few flat to moderately higher prices found their way into the mix. Trading was for Sunday-Monday flows because of the weekend transition between months.

With cooler weather in the process of replacing the mid-spring heat surge that had allowed prices to ride increased power generation load to higher levels in most cases during the first three days of the week, it was hardly surprising when quotes fell across the board Thursday.