futures

In yet another display of resistance to moving lower, the natural gas futures market bent but did not break Thursday morning as another triple-digit storage injection (100 Bcf) put bulls on the defensive. They battled back, however, and armed with weather reports calling for snow in Michigan and a tropical storm in the Gulf of Mexico, were successful in repelling the selling surge.

In what may turn out to be the most bullish 2-cent decline in recent memory, natural gas futures clawed their way back from early losses to finish near a high for the session. At $4.642, the October contract ended 1.9 cents lower on the day, but an impressive 9.2 cents above the $4.55 low notched early in the session. At 88,496, estimated volume was heavy and added credence to the rebound.

The market apparently got most of the expiring September futures-related bearishness out of its system Tuesday, because Wednesday’s numbers were close to flat in a majority of cases and weighted slightly toward the higher side, especially in gains of up to 8 cents in the Rockies and San Juan Basin.

Rising futures prices, hot temperatures in the Midwest/Midcontinent and the return of gas-fired generation in the Northeast following the blackout helped spur the gas market to move higher on Monday. A compressor station outage at the Sable Offshore Energy Project’s Goldboro plant in Nova Scotia also took Maritimes volumes down about 105 MMcf/d to about 355 MMcf/d, according to an ExxonMobil Canada spokesman.

As anticipated, Monday’s near-quarter fall in natural gas futures was felt in Tuesday’s cash market, where declines ranged from as little as 3 cents to about 20 cents at most points but were as high as around half a dollar or more at a few Rockies/Pacific Northwest points. Many of the smallest drops of less than a dime were clustered in the Northeast, and Algonquin citygates were essentially flat.

Despite calls for an expiration-day short-covering rally, natural gas futures traded listlessly sideways Tuesday, evidence that most traders had already squared their August books. With that the August contract limped off the board at $4.693, down 0.7 cents for the session, 60 cents less than July’s settlement and a whopping 72 cents below where it was when it became prompt contract a month ago. At 80,239, estimated volume was extremely low for an expiration day.

The Commodity Futures Trading Commission (CFTC) and the Federal Energy Regulatory Commission (FERC) Wednesday issued a joint safe harbor statement to “make absolutely clear” that neither “has or will bring false-reporting cases against energy market participants where the false report is inadvertent or based solely on human error.

Legislative language that would have given the Commodity Futures Trading Commission (CFTC) greater oversight over wholesale natural gas prices was stricken from a broad amendment on electricity that was unveiled last Wednesday by the Senate Energy and Natural Resources Committee, as the full Senate prepared to return to debate on the energy bill this week.

Cinergy Corp. reported Thursday that it has put one of its natural gas traders on administrative leave because of a Commodity Futures Trading Commission (CFTC) investigation into the company’s price reporting practices to energy trade publications from May 2000 through January 2001.