futures

Gas futures observers concluded Tuesday’s 6.7-cent slide was afalse breakout to the downside because May was unable to breakthrough support yesterday at $2.82 and rebounded a healthy 6.6cents on the day to $2.888. The high for the day was $2.900, whilethe low was $2.820. The three-month summer strip rose 5.7 cents to$2.918.

Ending a two-day slide, natural gas futures snapped back to lifeFriday as traders were drawn back to the long side of the market bysupportive technicals and stronger weekend cash prices. In just itssecond day as the prompt contract, May advanced 7.2 cents to finishat $2.945, just a penny off its high for the day and just 6 centsof its all-time high notched last Tuesday.

Taking into account strong gas futures prices despite thewarmest winter on record, a bleak supply picture and projections ofa very hot summer, PaineWebber reported an increase in its year2000 projection of composite spot gas prices from $2.40/MMBtu to$2.50/MMBtu. The firm’s report, issued yesterday, also indicatedthat the time is right to invest in diversified energy companies.

After gapping lower at the open, natural gas futures followed aslippery downward slope yesterday as traders liquidated positionsamid bearish technicals and ahead of warming temperatures expectedlater this week. In contrast to light selling seen last week,yesterday’s weakness manifested itself across the entire strip ofcontracts, led by the May contract which tumbled 7.6 cents to$2.744. Comparatively, the prompt contract eased 7.1 cents to$2.714 and the 12-month strip gave back 5.4 cents to $2.867.Trading was active, with an estimated 63,810 contracts changinghands.

After trading up to, but not through, stubborn resistanceMonday, natural gas futures eased yesterday as fund tradersliquidated a portion of their long positions amid bearish technicalconditions and ahead of warming temperatures expected in theNortheast U.S later this week.

As traders had expected, prices used Thursday afternoon’s andFriday morning’s futures strength as a springboard to achieveincreases that were mostly between a nickel and a dime Friday.

After a tumultuous morning rally and retreat, natural gas pickedits way higher yesterday as traders looked past a mixed technicalpicture to focus instead on the possible reemergence of seasonaltemperatures by week’s end. The April contract advanced 2.5 centsto $2.85. However, the real stories were in the out months, whichgalloped higher to post gains of 3.4 cents and 3.5 cents for thesummer and 12-month strips respectively.

Natural gas futures chopped lower yesterday in a tight, mostlyfeatureless session as traders continued to factor in the nowimminent threat of warming weather for much of the nation. Wideningits discount to outer months, the March contract was the hardesthit by the sell-off, tumbling 2.9 cents to finish at $2.541.Estimated volume was very modest, with just 44,670 contractschanging hands.

A futures screen that was almost a dime higher during morningcash trading and continued cold temperatures were enough to allowprices to put even more distance between themselves and indexesTuesday. Meanwhile, transport-constrained Northeast citygates wereback for a repeat performance of their skyrocket act from lateJanuary.