Erupted

Buoyed by weather forecasts, storage jitters, and strength in the cash market, natural gas futures erupted higher Wednesday as new buying competed with short covering in an expiration-day free-for-all. The February contract advanced 21.6 cents to go off the board at $5.66. However, the real story may have been the March contract, which gapped higher at the opening bell and did not look back as it advanced 27 cents to close $5.629. At 119,571 estimated volume was average for expiration day.

On-again, off-again wrangling with natives over land claims and resource development has erupted yet again in an area undergoing a boom in gas exploration in northeastern British Columbia, setting back one gas project but not noticeably slowing down the overall pace of producer expansion.

On-again, off-again wrangling with natives over land claims and resource development has erupted yet again in northeastern British Columbia, setting back one natural gas project but not noticeably slowing down the overall pace of producer expansion.

What a difference a day can make. Just 24 hours after natural gas prices erupted higher amid a frenzy of short-covering, the bears were back in control Wednesday as they pressured prices to fresh weekly lows. The June contract finished at $4.298, down 35.5 cents on the day but 2 cents above Friday’s close.

Amid concerns over another day of rolling blackouts inCalifornia and buoyed by speculative short covering, natural gasfutures erupted higher Tuesday as traders factored in the chancethat the market has found at least a temporary bottom. The Aprilcontract finished 22.4 cents stronger at $5.287, but even moreimpressive was the buying interest in the out-months, which enabledthe 12-month strip to advance 23.6 cents to close at $5.421.

In almost a carbon copy of Monday’s session, natural gas priceserupted higherTuesday morning only to spend much of the remainderof the session checking lower as traders took profits amidintra-day technical weakness and storage uncertainty. Ending athree-day, $1.25 dollar price rally, the January contract slipped4.9 cents to close at $7.384. Meanwhile, the 12-month strip tumbledconvincingly, down 13.6 cents to $5.555.

Following the lead of both the over-the-counter and cashmarkets, natural gas futures erupted higher yesterday morning astraders covered shorts on the outside possibility that a tropicalstorm might develop in the Gulf of Mexico. The September contractwas the biggest mover, posting an impressive 21.3-cent gain tofinish at $3.987.

Adding to gains achieved during Monday’s impressive rebound,natural gas futures erupted higher yesterday as traders bid theJuly contract to a new all-time high for a prompt month at Nymex.After gapping higher to open at $4.65, July checked back and forth,before eventually closing at $4.686, up 12.6 cents for the session.

A dispute has erupted in the Canadian courts between affiliatesMobil Oil and the Maritimes & Northeast Pipeline. Maritimes hasfiled a lawsuit with the Nova Scotia Supreme Court against Mobil,seeking C$3.29 million, plus C$100,000 in general damages,interest, legal costs and all out-of-pocket expenses.