Euphoria

Fueled by a bullish petroleum inventory report mixed with continued buying euphoria from speculative fund accounts, November natural gas futures shot to a new 20-month prompt-contract high on Wednesday. As of 2 p.m. (EDT), the prompt month reached a high of $7.75, a 62.7-cent premium over Tuesday’s settle and 31 cents above the high reached on Oct. 7. It settled at $7.623, up 50 cents.

Caught between the bullish euphoria surrounding gains in the nearby crude oil pit and the bearish reality of its own short-term fundamentals, the natural gas futures market shuffled quietly sideways Friday. On the technical side of the market the bag was similarly mixed as Friday’s closing prices rang bearish on the daily chart, but bullish on the weekly chart.

In a topsy-turvy session that made traders glad the weekend wasnear, natural gas futures spiked and retraced three times Fridayamid a bevy of fundamental and technical news. After encounteringsubstantial selling in the low $6.80s early in the day, the Januarycontract checked sideways for much of the session, finishing up 8.4cents at $6.673. Comparatively the rest of the 12-month strip, ledby March, which erupted 20.7 cents to close at $6.043, experienceddouble-digit gains.

It has been a good spring for bull traders at Nymex. SinceFebruary 26, the now-spot June contract has rallied nearly 70 centsto trade as high as $2.40 last week. But just as constructivetechnicals and low storage injection figures seemed to point tocontinued strength, the market spiraled lower Thursday and Friday.And while long liquidation spurred by the bearish one-two combo ofnuclear units coming back on line and moderating temperaturesacross the country were as good as reasons as any for the marketturning lower, traders remain divided as to the price directionheading into the summer. June finished the week mixed at $2.273, 2pennies above its close from the prior Friday, but 2.2 cents lowerfor the day.