Factors

Citing such factors as customer cooperation and recent storageactivity in March, ANR said it was able to rescind a Februarynotice requiring that interruptible storage customers under the MBSand DDS rate schedules draw their accounts down to a zero balanceby today. However, the pipeline added, due to abnormally highinventory balances remaining and overall operational concerns, itmust continue to limit interruptible injections “for theforeseeable future.”

Incremental prices closed out the month of January once againdefying bearish demand factors. In deals done Friday, most averagesvaried little from their Thursday positions. And though traderswere separating weekend business into Saturday/Sunday andMonday-only deals due to the shift from January to February, theyreported little appreciable difference in pricing between the twotime periods.

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.

A combination of stronger cash prices met with and conspiredwith constructive technical factors to lift the futures market forthe 4th straight day Tuesday. November managed a 5.9 cent rally tosettle at $2.202, but the big news of the day centered on the outmonths which posted similarly impressive advances, bringing the3-month strip up 6 cents. Estimated volume was a healthy 69, 463 onthe day.

Normally natural gas futures are influenced by a hodgepodge offactors: storage, technicals, support, resistance, supply anddemand. Of course last week was anything but normal as a hurricanewhich the market has not seen the likes of since Andrew, wasbearing down on the Gulf of Mexico leaving a wide swath ofdestruction in its wake. Now the question to be answered is whetherHurricane Georges (pronounced ZHORZH) will not only live in theminds of residents of Florida and the Carribean Islands, but alsoin the memories of natural gas traders. That was still a very murkyquestion as of Friday. One thing was becoming evident late lastweek: October’s expiration today will be anything but normal. But,despite the continued threat of storm, the October actually slipped0.2 cents to settle at $2.181 on Friday.

Lacking much else in motivational factors beyond Tuesday’sfutures dive, cash prices softened Wednesday as expected.Across-the-board decreases ranged from barely a penny to as much asa dime. A Midcontinent marketer was surprised the drops weren’t anygreater than 2-5 cents in her region.