Fueled

Fueled by strong cash prices, a constructive technical picture,and lingering storm concerns the natural gas futures market wasquick out of the gates yesterday as traders lifted the market toits highest point in over a month. However, the buying pressuredropped off as November prices crossed the $3.00 threshold, whichprompted participants to trim gains into the close. After notchinga $3.03 high, the November contract finished at $2.97, a 4.3-centadvance on the day.

Fueled by the season’s first hurricane hype and gains tacked onduring the Wednesday evening Access trading session, natural gasfutures gapped higher for the second day in a row yesterday asshort-covering and fresh buying created a tempest of bullishtrading activity. That buying pressure continued throughout much ofthe session, allowing the September contract to notch a new high of$2.905 before finishing at $2.898, up 10.6 cents from Wednesday’sclose.

Fueled by stronger cash prices and revised weather forecasts,the futures market erupted higher early yesterday as speculativeand commercial traders added to their positions. However, afternotching the highest mark for a spot month since the week endingDecember 12, 1997 at $2.77, the September contact filtered lower ina quiet afternoon session to settle at $2.721, up 2.3 cents on theday. Estimated volume was light, with 62,221 contracts changinghands.

Fueled by a smaller than expected storage injection figure,natural gas futures continued higher yesterday morning asspeculative buying easily erased the Wednesday evening price dip.The buying pressure continued throughout much of the day as bullshad their sights squarely set on last week’s high of $2.72. Theirpersistence paid off, and shortly after 1 p.m. the prompt monthpunched through and notched a $2.75 high on the day. However, notenough follow-through buying was seen entering the market, and theresulting sell-off deposited prices back down near unchanged forthe day. The August contract finished just a half-penny higher at$2.647.

Fueled by follow-through buying on the heels of Monday advances,the futures market ambled higher yesterday as traders weighed theimpact of bullish news expected to be released this afternoon. TheSeptember contract finished up to 2.3 cents at $2.598. Impressiveadvances were also seen in the out months with the October,November and December contracts notching similar gains.

Fueled by what one veteran trader called one of the mostdramatic price moves in the history of the natural gas market,futures prices rallied Monday as the prompt January contractsettled up 12.3 cents to $2.101. But that daily change paled incomparison to the enormous advances seen in the cash market wheredaily gains registered more than a half-dollar for many pipes.Forecasts calling for cooler temperatures for most of the countryand undervalued cash prices were reasons for the market strength,sources agreed.

The New York Public Service Commission (PSC) approved New YorkState Electric and Gas Co.’s (NYSEG) sale of all of itsfossil-fueled generation plants to AES NY Inc. and Mission EnergyWestside Inc. The $1.85 billion sale furthers the commission goalof encouraging utility divestiture of generation facilities as onestep in the process of introducing competition to New York’selectric industry. NYSEG is the first utility in the state toreceive commission approval for the sale of generation facilities.

Fueled by Tuesday afternoon advances, the November contractraced out to a strong start on Wednesday. But the rally becameshort-lived when it met with a wall of selling in the mid-teens,leaving the market to finish lower at the closing bell. TheNovember contract settled at $2.041, a 4.3 cent decline for theday.

The futures market followed an early example set by the cashmarket on Tuesday, as early selling fueled by losses in Monday’sAccess trading pushed the market lower for the second day in row.That enabled the November contract to not only gap lower at theopen, but also to gap below key support at $2.35 on its way to alow of $2.295. However, the buyers saw good value at those levelsand bid up the contract to its settle at $2.346, a 4.7 cent lossfor the day.