Exchange

Bearish fundamental factors once again took over at the New YorkMercantile Exchange Tuesday, sending the natural gas futures marketspiraling lower and nearly erasing gains registered over the priorthree trading sessions. Even cash prices, which continued to spikedramatically higher yesterday, did not influence the futuresmarket. After January opened below key support, the market neverlooked back as prices fell 18.8 cents to $1.913 at the closeTuesday. And just like that, the futures-cash basis has shrunk froma whopping 97 cents to a tight 14 cents over the past two days.

Changes were in the air last Wednesday at the New YorkMercantile Exchange. Traders were greeted with a new promptmonth-January, a stronger December cash market, and even a freshrally-thanks to a short-covering Tuesday. Just about the only thingthat hadn’t changed were the bearish fundamental factors-storageand weather-prevalent in the market. But once again thosefundamentals were king Wednesday, and the selling pushed theJanuary contract down 7.9 cents to $2.196 at the closing bell.

Washington Water Power affiliate Avista Laboratories Inc., adeveloper of fuel cells with proton exchange membrane (PEM)technology for distributed power markets, announced the receipt ofa $2 million technology development award from the Department ofCommerce’s National Institute of Standards and Technology (NIST)Advanced Technology Program (ATP).

Bulls have not had much to smile about in the last five monthsat the New York Mercantile Exchange, so it was to their surpriseand delight when a trio of factors — storage, technicals, andanother possible tropical storm — combined to lift the marketThursday. The three remaining months in 1998 all received an almostequal boost with October edging out the others slightly byadvancing 6 cents to settle at $1.712 in moderate trading activity.

Friday was a day of tests at the New York Mercantile Exchange.The market pushed lower on the open to test support at $1.81 onlyto rebound in the hopes of knocking out resistance at $1.875.However, both attempts failed and the September contract was leftto close at $1.833, almost unchanged for the day.

The New York Mercantile Exchange (Nymex) reported a fairlyactive first day of trading for the eastern electricity futurescontracts on Friday, with a total volume of 939 contracts traded.This, however, was 282 fewer contracts than the number tradedduring the first day of the western electricity contracts in 1996,a Nymex official said.

Tuesdays are oftentimes a day of small prices changes at the NewYork Mercantile Exchange, and this Tuesday proved to be noexception. The spot August contract settled unchanged at $2.365yesterday, as many traders reportedly remained on the sidelines inanticipation of the next AGA storage report to be released laterthis evening.

Activity at the New York Mercantile Exchange resumed after thelong holiday weekend Monday, and apparently traders hit the marketwith one primary objective in mind: to sell. The spot Augustcontract opened at what turned out to be its daily high of $2.43,and ended up falling 7.4 cents to settle the day at $2.365. Anestimated 32,810 total contracts changed hands.

Tuesdays and Wednesdays have been quiet lately at the New YorkMercantile Exchange with traders, brokers, and marketers waitingcalmly in anticipation of the weekly AGA storage report. In fact,since the end of April, daily changes to the spot month contract onthose days have been small, averaging slightly more than 3 centswith no change greater than 8 cents. However, this is natural gasand just when you think you have things figured out, it throws youfor a loop. This week, July plummeted on Tuesday to the tune of11.1 cents only to rebound 18.5 cents on Wednesday. That left thespot month at $2.174 at the close of the regular trading sessionWednesday afternoon.