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Natural gas futures continued lower Thursday as a gap-lower open and follow-through selling on the heels of Wednesday’s bearish storage report pressured futures prices briefly beneath the $4.20 level. At the closing bell, the prompt June contract was a nickel lower on the day at $4.248.

California softness was the exception to Monday price increases that were in double digits in most cases and continued a general rally that had begun on Friday. Sources attributed the upticks mostly to a further rise in futures, but acknowledged that a widespread warm-up that created some date-specific high temperature records over the weekend was starting to generate some “decent” air conditioning load, particularly in the South and mid-Atlantic.

Just as a couple of producers had predicted, the screen’s upturnMonday afternoon after being mildly negative earlier was enough togenerate a moderate cash rally Tuesday. Only the SouthernCalifornia border and Malin continued to head lower. Just as mostof Monday’s declines had been between 10 and 20 cents, the sameapproximate range applied to most of Tuesday’s rises.

As a follow-up to its gas quality advisory posted Tuesday (seeDaily GPI, Feb. 28), NGPL listedWednesday 12 points on its Louisiana Line (east of Compressor Station302 in Segments 23, 24 and 25) that are currently exceeding thepipeline’s limit of 1,050 Btus per cubic foot on receipts. EffectiveMarch 1, nominations at those points will not be confirmed untilfurther notice “unless acceptable mitigating actions have beenarranged,”

Pressured by follow-through selling on the heels of Wednesday’sstorage report, and amid crashing cash market values, the naturalgas futures market tumbled lower Thursday as weak longs continuedto head for the exits. After gapping lower at the open, theFebruary contract checked sideways-to-lower throughout the day tofinish at $8.708, down 42 cents on the session.

Mitchell Energy announced that follow-up drilling in two TexasGulf coast exploratory plays has increased natural gas productionby 30 MMcf/d and oil production by 550 b/d. For November, thecompany’s overall daily production averaged 344 MMcf of gas and5,400 bbl of oil, excluding the effect of a two-day shutdown of itsBridgeport plant to complete connections that will increase theplant’s throughput capacity by 50% in late December. “Discovery ofthe Lower Wilcox and Lake Creek area wells is another example ofour ability to combine 3-D seismic technology with our extensiveknowledge in core field areas to add new reserves,” said CEO GeorgeP. Mitchell. “While the Barnett shale play in North Texas isclearly the driver for much of the company’s volume growth,drilling in our other core areas can also be quite attractive andadd significant production as well.”

Propelled by follow-through buying on the heels Wednesday’sbullish storage report, natural gas futures shuffled higheryesterday, as traders looked past the expiring August contract tofocus on the out months.

Natural gas futures continued lower yesterday as follow-throughselling on the heels of Friday’s disappointing close conspired withweaker cash market prices. Perhaps more bearish than its 11.9 centdecline, however, was the fact that August gapped below key channelsupport at $3.80 on the open. Traders agree that while breaking andsettling below support is bearish, gapping through can be acrushing blow for a market.

Led by follow-through buying, record-setting heat out West, anda constructive over-the-counter market, natural gas futures eruptedhigher at the open yesterday as buyers propelled the market to newthree and a half year highs. The rally was short-lived, however,and after posting a $3.985 high during the first hour of trading,the June contract tumbled lower under a wave of selling pressure tofinish at $3.747, down 7.8 cents on the day. Estimated volume wasextremely heavy, with 134,429 contracts changing hands.