Feeding

Feeding off gains notched Friday morning, natural gas futurespushed to fresh highs yesterday as funds and locals added to theirlong holdings. With that, the June contract has advanced 16 centsin the last two trading sessions to move past and settle above itsprevious life-of-contract high with a $3.216 closing price Monday.Estimated volume was light at 51,288 contracts despite theimpressive price move. An average trading day would see roughly20,000 more in estimated volume.

Feeding off Monday’s late-day advances, natural gas futurescontinued higher yesterday as traders covered short positions andnotched new longs amid a freshly bullish technical outlook. Theprompt April contract posted new life-of-contract highs for thesecond day in a row, advancing 4.9 cents to finish at $2.963.Somewhat less impressive were the out months, led by May, June,July and August, each of which gained 3.3 cents.

Feeding off Wednesday’s strong close, natural gas futures spikedhigher yesterday morning, but ultimately finished lower in anextremely quiet session. After notching a new life of contract highat $2.90 shortly before noon (EST), April was hit with light profittaking which demoted the contract to $2.851, a 1.5-cent loss forthe session.

Feeding off late gains achieved Thursday, natural gas futuresrumbled higher Friday as traders continued to look past theoverwhelmingly bearish short- and medium-term weather outlook tofocus instead on the potential for higher prices this summer. Withthat upward bias, the March contract advanced 5.4 cents to settleat $2.603, just a fraction of a cent below the $2.61 Februarysettle, but nearly a dollar above the $1.666 March 1999 closingprice.

Feeding off January’s late expiration-day rally, the futuresmarket shuffled higher yesterday as local buying slightlyout-matched trade selling in an extremely light trading session.The only notable feature was a late local-led sell-off that trimmedgains into the close. With that, the February contract completedits first day of trading as the spot contract up 2.5 cents to$2.394.

Feeding off last Thursday’s late sell-off, natural gas futurestumbled lower yesterday as traders liquidated January positionsahead of the contract’s expiration Tuesday. After gapping lower atthe open, January dropped below key support levels at $2.38-39 and$2.32-34 en route to its $2.271 settlement. Including yesterday’s12.8-cent decline, the January contract has plummeted 45 cents fromMonday’s $2.715 high of a week ago.

Feeding off bullish weather forecasts, the natural gas futuresmarket snapped back yesterday as local and fund traders added totheir growing long positions. That enabled the November contract toerase Thursday’s 13.6-cent downward retracement and retest the$3.00 level in active, pre-weekend dealings. The prompt monthfinished strongly and closed at $2.975, a 14.1-cent advance on theday.

Feeding off gains notched during the Wednesday evening Accesssession, the futures market climbed higher yesterday as traderscovered shorts positions created during the recent dip. However,after failing to punch through resistance at $2.70 early, theNovember contract slipped in the afternoon before finishing at$2.642, a 4.1-cent advance on the day.

Feeding off Wednesday’s weakness and reflecting fading concernsthat any of the three tropical systems would reach the gas-richGulf of Mexico, the futures market tumbled lower yesterday as bothcommercial and speculative traders exited long positions. Theresultant price slide left the September contract just penniesabove its $2.90 low for the week and turned several bulls intoshort-term bears. The prompt month finished 8.2 cents lower at$2.948 shortly after notching a $2.93 low late in the session.