Fundamental

For the third-straight trading session, natural gas futures tumbled early, but quickly stabilized Monday as traders continue to view the market with apprehension. On one side is the market’s seasonal tendency to rally in September; on the other is the bearish storage and weather outlook.

It wasn’t much, but prices could claim a bit more weather support than they had last week in recording upticks Monday ranging from only a penny or two to about 15 cents. Gains were fairly evenly spread across geographic markets.

With little in the way of fresh fundamental information, natural gas futures traders quietly took profits Friday in sparse pre-weekend trading. In contrast to the previous Friday’s frenzied long liquidation, the selling late last week was light, evidence that traders like the market’s chances of climbing higher when trading resumes this week. The October contract finished at $4.771, down 3.9 cents for the day, but up 4 cents for the week. At 39,107, estimated volume was extremely light.

With little in the way of fresh fundamental information Friday, the natural gas futures market chopped sideways within a narrow 8.5-cent trading range. Nearly equal amounts of bargain buying and fund selling were seen in the August contract, which followed Thursday’s impressive bounce with a more subdued, 2.8-cent decline to finish the week at $5.022. At 49,295, estimated volume was evidence of the lackluster trading Friday.

With little in the way of fresh fundamental news and plenty of uncertainty ahead of Thursday’s storage report, natural gas futures traders played it close to their vests Tuesday. The July contract had a hard time mustering either a rally or a decline as it managed only an 11-cent trading range. It closed at $5.712, up 0.6 cents for the session. At just 62,296 contracts, estimated volume was light for the second day in a row.

Cash prices lost the support they had been deriving from strong energy futures Tuesday, and a near-total lack of cooling load in northern market areas appeared to be finally bringing a three-day upward run to a halt. Flat numbers dominated trading, with few points outside the San Juan/Rockies market varying by more than a nickel up or down from unchanged.

Seeing little in the way of new fundamental influences and getting only a late nudge downward from the storage report, the cash market generally marked time Thursday. Nearly all points were about a dime or less up or down from flat, with moderate gains in the majority. Upticks of 20 cents or more in quotes for San Juan Basin and Northwest (South of Green River) were the major outliers from the overall market.

The cash market reacted as expected to Monday’s futures weakness and further declines in fundamental weather support, registering drops between about a nickel and 20 cents at nearly all points Tuesday. Those in the range of 10-15 cents formed a slight majority.

With little fresh fundamental news of its own, the natural gas futures market was a slave to the whims of other markets’ traders Friday. After dropping lower at the opening bell in sympathy with 30-cent losses in the cash market, natural gas futures regrouped and trended higher during the open-outcry session, as buyers fed off the strength in the nearby crude oil pit.