Covered

After navigating the long holiday weekend without a market-affecting event, natural gas futures traders — who had covered some shorts Friday to mitigate risk — let some air out of the balloon on Tuesday as the October contract closed at $3.852, down 8.7 cents from Friday’s finish.

October natural gas futures rose as traders elected to minimize risk to higher prices and covered short positions prior to the weekend as Tropical Storm Ingrid moved west. It is a common practice for traders to not carry any kind of short position over a weekend especially during hurricane season when prices could shoot higher Monday should the storm appear to threaten the Gulf Coast. October futures rose a hefty 25.0 cents to settle at $6.279 in active trading on the New York Mercantile Exchange.

After opening Friday at $6.560, which would end up sticking as the low for the day, February natural gas futures pushed higher as commercial hedgers covered their short positions ahead of the weekend. The prompt-month contract recorded a high of $6.940 before settling at $6.886, up 56.2 cents on the day and 28.5 cents higher than the previous week’s close.

Following Tuesday’s minor increase, January natural gas futures sprung higher Wednesday as traders covered short positions and some weather forecasters left the door open for some colder temperatures later in the month. After reaching a high of $7.785, the prompt month dropped down to close at $7.673, still good for a 24.3-cent gain on the day.

FERC took a “notable first step” last week when its issued its long-awaited policy statement on natural gas quality and interchangeability, but the agency still needs to provide the industry with more guidance on key issues, a producer coalition told the agency Wednesday.

Gas futures extended Monday’s gains on Tuesday as market participants covered short positions and also responded to the Northeast heat and Tropical Storm Claudette in the central Caribbean. The National Hurricane Center upgraded what had been a tropical wave directly to a tropical storm on Tuesday. The August futures contract ended the day up 12.2 cents to $5.503, not far from its daily high, but opinions were mixed on the market’s direction for the remainder of the week.

Actual fourth quarter results of the 37 producers covered by the Raymond James energy team indicate that U.S. natural gas production declined by 2.7% sequentially and 6.4% year-over-year, a more aggressive drop than the analysts suspected just weeks ago. “It ain’t pretty,” said analysts in the latest “Stat of the Week.”

Actual fourth quarter results of the 37 producers covered by the Raymond James energy team indicate that U.S. natural gas production declined by 2.7% sequentially and 6.4% year-over-year, a more aggressive drop than the analysts suspected just weeks ago. “It ain’t pretty,” said analysts in the latest “Stat of the Week.”

Natural gas futures vaulted higher Friday in heavy activity as traders covered shorts ahead of the first blast of cold weather expected across most of the country this week. After easily piercing psychological resistance at $4.00, the November contract paused near the $4.10 mark as traders caught their breath. However, it turned out to be only a quick break and prices rallied into the closing bell. November finished at $4.146, up 31.8 cents for the session and within striking distance of the recent top at $4.25.