Dominate

Forget previously discussed concerns about 2006, it’s the summer of 2005 that’s worrying California state energy officials who gathered to review an update of the state Energy Action Plan Tuesday. Dominating their discussions were “what-if” questions and proposed contingencies, including everything from mandatory load-reduction programs to accelerated power plant-building and delayed plant closings for older units

Forget previously discussed concerns about 2006, it’s the summer of 2005 that’s worrying California state energy officials who gathered to review an update of the state Energy Action Plan Tuesday. Dominating their discussions were “what-if” questions and proposed contingencies, including everything from mandatory load-reduction programs to accelerated power plant-building and delayed plant closings for older units

Though it opened and closed at almost the same level, the natural gas futures market was anything but a kiddie’s ride Tuesday as waves of buying and selling led prices on a roller coaster of trading activity.

Tuesday might have looked bearish from the previous day’s vantage point, but other than some moderate softening that clustered primarily in the West, all other points ranged from flat a little more than a dime higher in a near-repeat of Monday trading. A majority of Tuesday’s gains were around a nickel or smaller.

Moderate softness continued to dominate most of the April swing market on its penultimate day of trading Monday. Cold fronts expected in the Mid-Atlantic, Northeast and Midwest, along with thunderstorms and mountain snows in the Northwest, failed to provide the support needed to avert further price falls at most points.

Buoyed mostly by storage demand, modest firmness continued to dominate eastern markets Tuesday, although a few points were flat and only Transco Zone 6 non-New York managed a gain of more than about a dime. Softness reigned in most of the West, which not coincidentally is the only region that was not drawing down storage in the last two Energy Information Administration reports.

With a wide variety of storage estimates and medium-range weather forecasts, natural gas traders turned to technical factors Wednesday morning as they bid prices off recent lows and tested overhead resistance. The January contract managed a 19-cent rebound to $4.365 in just 90 minutes, but resistance in the mid-$4.30s held and prices then retraced lower. January finished at $4.298, up 7.2 cents for the day, but 6.7 cents off its $4.365 high for the session.

A vast majority of the cash market apparently decided to take it easy Wednesday and await further developments. Mild softness at a few Northeast points and losses between a nickel and 15 cents in San Juan Basin and the Rockies were the only aberrations in an otherwise basically flat price landscape.

Prior to Friday (the official first day of winter), the weekend market had looked like a toss-up, with forecasts of colder Christmas weather throughout the East and into the Southwest arrayed against the demand slump from extended business closures. Chalk one up for the bulls as the upcoming cold temperatures weighed a little more heavily on traders’ minds Friday, prompting them to send most points higher by small amounts.