Expired

October natural gas rose moderately Tuesday as uneventful options trading expired and analysts wondered how much longer drilling can continue under current conditions. October gained 4.5 cents to $3.827 and November rose 3.0 cents to $3.875. November crude oil streaked higher $4.21 to $84.45/bbl in a fit of euro-centric optimism.

July natural gas futures expired on a firm note Tuesday as traders had to factor in a slightly higher weather premium as a tropical system was upgraded and near-term weather forecasts called for warm temperatures. At the close July natural gas rose 10.1 cents to $4.357 and August added 9.0 cents to $4.354. August crude oil surged $2.28 to $92.89/bbl.

July natural gas futures moved modestly higher Monday as options expired and traders saw the market holding its own. Recent data shows money managers favoring the “sell” side of the trading ledger. At the close July had risen 2.7 cents to $4.256 and August was up 1.4 cents to$4.264. August crude oil slipped 55 cents to $90.61/bbl.

It was difficult for traders to draw any useful conclusions about market direction Tuesday as the April contract expired. For the moment an atmosphere of caution permeates the bullish camp as traders look for Monday’s highs to be breached before making additional buys. At the end of the day April had shed 13.4 cents to $4.240 and May lost 18.5 cents to $4.263. April crude oil rose 81 cents to $104.79/bbl.

Any attempt by the new Democratic administration and/or the Democratic Congress to reinstate the expired moratorium on oil and natural gas drilling off the East and West coasts would be “crazy,” said ExxonMobil CEO Rex W. Tillerson last Thursday.

With the initial 30-day negotiating period expired, CME Group Inc., owner of the Chicago Mercantile Exchange, and Nymex Holdings Inc., owner of the New York Mercantile Exchange, early last week agreed to extend talks regarding CME’s potential acquisition of Nymex until March 15.

November natural gas futures expired on a strong note Monday as traders observed not only a soaring crude oil market, but also a late-season emergence of tropical weather. November futures settled at $7.269, up 5.1 cents, and the now front-month December contract finished at $7.974, up a stout 16.6 cents. December crude oil gained $1.67 to a record close of $93.53/bbl.

August natural gas futures expired on a positive note Friday, gaining 16.7 cents to settle at $6.110 in active trading on the New York Mercantile Exchange. Traders cited short-covering as the dominant factor leading to the rise, but in the larger scope they noted that fundamental factors continued to favor the bears. Uninspired temperature and tropical forecasts could lead to a repeat of last year’s price collapse.

While natural gas futures were much quieter than they had been when the April contract expired Tuesday, the fact that the May contract on Wednesday was able to keep, and even build on, its gains “spoke volumes” when compared to the rest of the energy complex’s performance.