futures

Even with futures no longer pointing out an upward path, the cash market continued to forge ahead Wednesday with new gains that remained mostly in double digits. As on the day before, a large majority of increases were between about a dime and 15 cents.

Adding to the losses triggered by the release of fresh American Gas Association storage data Wednesday, natural gas continued lower early in the session yesterday only to stabilize at midday as scale-down buying interest met equally with profit-taking long liquidation. The March contract finished the session at $2.186, down 5.9 cents for the day, and just off its three-day low at $2.18.

The futures traders who managed to stay alert during Tuesday’s lethargic trading session were able to push the March contract below Monday’s $2.08 low and drop the daily close 4.3 cents to $2.074. But the market remained range-bound with very little fundamental news to prompt significant movement. The high for the day was set just after the opening bell at $2.14 and the $2.070 low was reached just prior to the end of regular trading.

Buoyed by a larger-than-expected 137 Bcf storage withdrawal figure, natural gas futures probed the upside Wednesday afternoon as traders continued to shy away from the short side of the market. After working its way lower throughout most of the morning, February turned higher just before noon EST when it became apparent that sellers would not be able to keep prices below the $2.30 level. The prompt month finished the session in an undeniably bullish manner, carving out a new two-week high and closing 10.3 cents stronger on the day at $2.394.

With a modest 4.1-cent advance and $2.291 close Tuesday, February natural gas futures took another baby step toward what analysts and technicians believe could be the formation of a price bottom. That may seem like a bold prediction considering the overwhelmingly bearish fundamental picture. But after lying dormant during the downward price spiral of 2001, and in consideration of the large speculative short position, bull traders are cautiously rearing their horns once again.

Confronted with a bearish storage situation and a bullish weather outlook, natural gas traders opted to follow the guidance of the latter Thursday as they lifted the market off of a negative close to notch the first positive close for the week. The January contract received the biggest buying boost, shuffling 7 cents higher to close at $2.686. Estimated volume of 90,049 was high considering the extremely-tight, 5-cent trading range.

Feeding off late session gains notched Wednesday, natural gas futures plodder higher Thursday as traders continued to look past bearish fundamental factors to focus on the winter weather forecasts and modestly constructive technical indicators. However, an extremely light estimated volume of just 61,048 limited the market’s upside potential, and as a result, the January contract experienced an “inside-day” on the daily charts with a lower high and a higher low. The prompt month settled at $2.756, up 3.7 cents on the day.

Natural gas futures prices stabilized late Wednesday after sinking to a new two-day low following the AGA announcement that 22 Bcf had been withdrawn from underground storage last week. The January contract settled at $2.719, down 8.4 cents for the session but well above its late-session low of $2.63. Estimated volume was light, as just 67,503 contracts changed hands.

In response to a stunningly bullish weather forecast for the last week of December, natural gas futures shot higher Monday morning as short traders elected to take their profits and head for the exits. As one might expect, the January contract received the biggest buying boost, etching a 17.9-cent advance to close at $2.747, its highest settle since becoming the prompt contract late last month.