Fill

Exhibiting a symmetry not often seen in the hectic world of natural gas futures trading, prices spiraled lower Thursday on bearish storage data, exactly retracing the gains seen following last Thursday’s bullish storage report. Last Thursday, the Energy Information Administration (EIA) reported a lower-than-expected 74 Bcf injection and this week the EIA reported a greater-than-expected 82 Bcf refill. In both instances, the price reaction was immediate and substantial. On Aug. 7 the market leaped 33.7 cents higher, while Thursday the market dropped 28.8 cents to close at $4.891.

Breaking the string of triple-digit weekly storage refills at four, the Energy Information Administration (EIA) Thursday morning announced a 97 Bcf injection for the week ending June 27. Natural gas futures prices, which were already in the process of a cautious short-covering rally, used the smaller-than-expected refill as a springboard to higher levels. But after a quick spike to an intra-day high at $5.36, the August contract was hit with a steady barrage of selling late Thursday morning and early afternoon. August closed mixed at $5.226, 2.7 cents higher in Thursday’s holiday-abbreviated trading session.

After failing to fill in the chart gap created by the higher opening, natural gas futures erupted to new 16-month highs Monday, as traders bought heavily into the season’s first blast of cold weather. Including Monday’s price hike, the November contract has notched gains in four out of the last five sessions, advancing 17% off the $3.67 low Oct 7. It closed at $4.303 Monday, up 15.7 cents for the session. At 104,033, heavy estimated volume was proof that few traders elected to observe the Columbus Day holiday.

After checking higher for much of the session Wednesday, natural gas futures moved back down to near unchanged, despite the release of a lower-than-expected storage injection figure. Buyers propelled the December contract back above the psychologically important $3.00 level just as the report was released. However, the advance failed to retest Monday’s $3.08 high, and that was a sign of weakness to traders. The December contract sifted lower from that point, closing with a one-cent loss at $2.87.

The industry picked a good year to fill up the nation’s gas storage fields. This winter could be bitter cold, according to two major weather outlooks released last week by the National Oceanic and Atmospheric Administration (NOAA) and Salomon Smith Barney Meteorologist Jon Davis. Both forecasts expect the winter to be colder than normal with temperatures similar to last winter on average but with significant swings in temperatures and precipitation.

President Bush has announced his intention to nominate Joseph Timothy Kelliher to fill out the five-member Federal Energy Regulatory Commission.

Amid a stunningly bullish one-two combination of a tropical depression and a record low storage refill for the month of August, natural gas futures soared higher to test one-month highs yesterday as traders covered shorts initiated on recent moves below the $3.00 mark. The September contract rode the buying wave for a 37.4-cent advance, breaking through several levels of resistance on its way to a $3.468 closing price.

Rebecca Armendariz Klein has been tapped to fill the last vacant spot on the Texas Public Utilities Commission by Gov. Rick Perry. Armendariz Klein currently is a consultant with KPMG Consulting and served as general government policy director under George W. Bush when he was governor. She also has worked as a senior attorney for the Texas PUC and as a telecommunications law analyst for the American Enterprise Institute. Perry also announced that Mario Max Yzaguirre, named two weeks ago to the Texas PUC, will become the new chairman of the three-member panel.

If you trade natural gas, yesterday was a good day to be glued to your chair. Approximately eight minutes ahead of its scheduled 2 p.m. EDT release, the American Gas Association reported that a whopping 106 Bcf was added to underground storage facilities during the week ending June 15, bringing working gas in storage levels to 49% full at 1,609 Bcf. Futures reacted instantly, tumbling 15 cents to $3.75 just 10 minutes after the report was released. The prompt July contract would never recover from the initial selling surge and finished 24.7 cents lower at $3.734.