Expiration

With a holiday weekend spent mulling sub-$4.00 natural gas under their belts, traders at the New York Mercantile Exchange wasted little time taking the June contract for one last ride lower Tuesday, as they demoted the prompt month through several levels of support. By virtue of its $3.738 final closing price, the June contract limped off the board with a 23.5-cent loss for the day, resting a whopping $1.203 lower than where it was when it began its tenure as prompt contract at Nymex a month ago.

As many traders had expected, the moderation of cold weather ineastern markets and the screen’s expiration-day dive were enough todrive the late-March swing market sharply lower in nearly all casesThursday. Only new increases at the Southern California border andPG&E citygate defied the overall downtrend.

Despite anxious moments, California’s staggering grid systemheld together Wednesday, avoiding the rolling blackouts somein-state market participants feared would happen in the wake of thefederal emergency order expiring.

An expiration-day nosedive by the February futures contract,chilly but unremarkable weather for this time of year (despitesnowfall and icing in some northern market areas), and the prospectof more small storage withdrawal reports in coming weeks kept bearsin command of the cash market Monday.

Despite a lower open and crumbling cash market values, naturalgas bulls fought their way higher on Friday as February pricesmoved above a key momentum number on technician’s charts. TheFebruary contract spent most of day trimming losses incurred duringthe overnight Access session, which paved the way for a lateshort-covering rally. The prompt month finished the day at $7.256,down 1.4 cents for the session but well above its $7.10 openingmark.

Despite the huge post expiration-day futures correction lastThursday, prices rebounded some Friday and for good reason,according to Salomon Smith Barney energy analyst Robert Morris.

Despite the large post expiration-day futures correctiondownward last Thursday, prices rebounded some Friday and for goodreason, according to Salomon Smith Barney energy analyst RobertMorris.

Taking a cue from the July contract, which tumbled in anexpiration-day sell-off, August began its tenure as prompt month byslipping lower yesterday morning as traders continued to look pasta bullish storage situation to focus on bearish short-term demandoutlooks. But just like other moves lower in recent weeks,yesterday’s retracement was short-lived and by 11:15 a.m. (EDT)buyers had promoted the near-month back into positive territory onthe day.

Less than 24 hours after posting a new all-time high for aprompt month, the July contract was hit with massive longliquidation that sent the expiring contract 31.7 cents loweryesterday to $4.369.