Dissipated

July natural gas futures retreated Monday as much of the impetus for higher prices in play last week — forecast hot weather and soaring oil prices — dissipated. July dropped 8.9 cents to $12.604 and August dropped 7.9 cents to $12.684. July crude oil fell $4.19 to $134.35.

The upward enthusiasm of Tuesday quickly dissipated Wednesday as traders reverted to tried and true seasonal spread trading. April futures fell 10.6 cents to $7.366 and May eased 9.7 cents to $7.491 as funds and managed accounts bought May contracts and at the same time sold April and also bought January and sold October.

January natural gas futures explored lower price levels Monday as the cold snap of weather from the previous week dissipated as forecast, leading traders to focus on the prospect of burdensome supplies at the end of the heating season. After putting in a low of $7.220, the prompt month rebounded to close at $7.427, down 13.4 cents from Friday’s close.

As Tropical Storm Cindy dissipated, the National Hurricane Center (NHC) reported late Wednesday that Tropical Storm Dennis had reached hurricane status with winds near 80 mph, making it the first hurricane in the Atlantic during the 2005 season. The change was posted based on an Air Force Reserve Hurricane Hunter aircraft surveillance mission, which reported the high speed winds as the storm moved over the central Caribbean Sea.