Expiry

While winter does not officially conclude for another threeweeks, it was laid to rest yesterday in the gas pit at Nymex as theMarch contract filtered lower in a long liquidation sell-off duringits last hour of trading. The March contract expired at $4.998,down 13.3 cents on the session and more than $1.10 less than whereit was when it became prompt month back on Jan. 29.

After gapping dramatically lower on the open, natural gasfutures took on the trajectory of a safe pushed out of a ten-storywindow yesterday as the market dropped to its lowest level sinceNov. 29. The expiring February contract was the hardest hit by theselling, crashing 96.3 cents lower to close at $6.293. The outmonths did not fair much better, as the 12-month strip tumbled$0.49 lower to close at $5.563.

Fueled by moderating weather forecasts and following Monday’s21-cent decline, natural gas futures tumbled lower in a classicexpiration-day long liquidation Tuesday, as traders rolled theirprompt month positions into back months. After a back-breakingsell-off in the last five minutes of trading Monday, the Decembercontract gapped lower at the open and tumbled 35.2 cents to itsfinal resting place at $6.016 yesterday.

In what has become almost a routine, natural gas futures coastedto another sizeable gain Friday as traders bid up the June contractin an expiration-day buying frenzy. With no fresh news in which tosink their teeth, traders were content to chew on concerns thatstorage is growing at too slow a pace to match predicted demandlevels, both this summer and next winter as reasons for the rally.Becoming the first contract to post a final settlement above $4.00,the June contract notched an impressive 17-cent gain to settle at$4.406 after peaking at $4.50 during a volatile final 30 minutes oftrading.

Natural gas bulls were back on the defensive yesterday after anearly attempt to push prices to new highs above $3.175 fell short.Once initiated, the downward momentum continued throughout much ofthe trading session, as traders took profits and filled in a chartgap created by Monday’s higher open. May and June contractssuffered a uniform 2.7-cent setback to finish at $3.110 and $3.124respectively.

Fueled by a late sell-off, natural gas futures continued lowerlast Wednesday and put the finishing touches on a December futurescontract which slipped a whopping $1.06 or one-third of its valuesince becoming the spot contract a month ago. With no fresh news todigest, the market defaulted to the same old negative price outlookformed around above-normal temperatures and plentiful gas supplies.After hitting a black hole of buying below $2.21 shortly after noonWednesday, the December contract free-fell 6.9-cents to expire at$2.12 in abbreviated pre-holiday trading.

After resisting for nearly two trading sessions the promptcontract finally caved to selling pressure late Tuesday as localtraders liquidated the last of their positions. On that sour notethe October natural gas futures contract completed its tenure asprompt month yesterday by slipping 7.2 cents to $2.56. Estimatedvolume was robust as 122,906 contracts changed hands.

As the countdown to today’s May futures expiry continuedTuesday, swing cash prices certainly did their part to encouragethe bulls in Nymex’s trading pit. But in a form of reciprocatingsupport, sources said late-April price rises of about a dime inmost markets were based almost solely on screen upticks Monday andTuesday. Except for moderate air conditioning load in Texas and theSoutheast and a bit of lingering chill in the West, weatherfundamentals were almost non-existent, they said.