futures

With the natural gas futures arena awaiting fundamental news to push it in one direction or the other, a just released WSI Corp. temperature forecast could have bulls bellying up to the bar in the near-term. According to the Andover, MA-based weather forecasting and business solution provider, the May-July period should average above normal temperatures for a majority of the U.S., except for the East.

Trading within a very slim 13-cent range, May natural gas futures on Wednesday turned in yet another uneventful session as market fundamentals remain quiet. After putting in a low of $6.770, the prompt month went on to settle at $6.808, down a dime on the day, as the market awaited fresh storage news Thursday morning.

Pending Senate legislation reauthorizing the Commodity Futures Trading Commission (CFTC) comes up short because it fails to give the agency the authority to oversee over-the-counter (OTC) natural gas trades, including forward contracts, swaps and options, an industrial energy consumers group told Senate leaders who crafted the bill.

With natural gas futures prices dropping more than 50% from their Dec. 13, 2005 high of $15.78, utilities across the U.S. continue to announce refunds and rate reductions for customers — who are paying rates that were adopted during higher prices. Atlanta-based AGL Resources said Thursday that its residential utility customers from New Jersey to Florida will save nearly $45 million this year as a result of recent rate reductions or refunds at all five of its utility operating companies.

A federal appeals court in Washington, DC on Friday upheld a lower court’s decision requiring the Commodity Futures Trading Commission (CFTC) to turn over documents to E. & J. Gallo Winery that the agency obtained during an investigation into the natural gas trading activities of WD Energy Services. Gallo pursued the documents as part of its lawsuit against the now-defunct U.S.-based energy trading unit of EnCana Corp.

In their first regular session as prompt month, April natural gas futures accomplished something the March contract failed to do its entire run at the front, which is break convincingly below entrenched support around the psychological $7.00 area. The prompt month ended up settling 52.4 cents lower than Friday at $6.789, setting a nine-month low. The July 2005 contract settled exactly at $6.789 on June 1, 2005.

Tuesday’s futures gain of more than half a dollar proved to have more support for the cash market than a couple of sources had expected. Prices were up Wednesday at a majority of points, although nearly all of the rally was based in the East, where it got a little help from slight trends toward colder weather in the Midwest and Northeast market areas.

Settling lower for the fifth consecutive regular session, March natural gas futures on Friday brushed off winter storm concerns for the weekend en route to carving out a new low for the move at $7.250. The prompt month finished the week at $7.316, down 16.3 cents from Thursday but an astounding $1.297 lower than the contract’s close in the prior week.

With natural gas futures prices reaching six month lows last week, energy analysis firms are having to reassess their 2006 price estimates to account for the unseasonably warm weather streak that much of the U.S. has experienced this winter-to-date. Analysts at Raymond James said Monday that they were lowering their natural gas forecasts for the first half of 2006 due to “highly unfavorable weather.”