Gapped

October gas futures gapped 10 cents to the upside at the opening bell Tuesday, leading some to believe a solid bounce would continue higher off Monday’s significant $5.440 low, the lowest a front month has traded in nearly two years. However, the front-month contract reversed course in morning trading and ended Tuesday down 9.6 cents at $5.574, just above a daily low of $5.560.

Canada Southern Petroleum shares gapped sharply higher on the NASDAQ Wednesday morning and reached a new 52-week high of $13.49 after Petro-Canada announced that its subsidiary Nosara Holdings Ltd. was raising its offer for the shares of the company for a second time to $13/share from $11. Nosara’s original offer in May to Canada Southern shareholders was $7.50, but a bidding war with Canadian Oil Sands and Canadian Superior over the shares raised the stakes significantly (see Daily GPI, June 30).

Taking a break from its recent trend lower, August natural gas futures on Monday gapped higher to open and finished on a positive note. The prompt month closed out the day at $5.608, up 8.5 cents from Friday’s close.

Without much new information to trigger a significant change, April natural gas futures gapped lower at the opening bell to $6.740 in response to the continuing heavy storage inventory situation, but then managed a slow climb throughout the day Tuesday to end up 3.3 cents at $6.868. April crude seemed to move almost in lockstep, initially dipping to $59.60 but then ending the day up 15 cents at $60.57/bbl.

After the January contract gapped 26.6 cents higher to open at $11.900 on Tuesday in its debut as the prompt month, the contract felt its way around, bouncing within a range from $11.670 to $12.150 before settling at $11.736, up 10.2 cents for the day.

After trading significantly higher in Sunday night trading on bullish weather forecasts, February natural gas futures gapped higher on the open Monday at $6.33. The prompt month did not stop there. Just before noon (EST), February ran up to notch a trade at $6.55, before receding during the afternoon.

For the second straight session, natural gas futures gapped lower at the opening bell. But in contrast to Monday’s session-long price retreat, the market rebounded Tuesday, pumping life into bulls who are suffering through some mild winter temperatures. The January contract finished at $6.143, down 18.1 cents for the session, but more than 20 cents above its low for the day.

After trading above $32/share on Tuesday, shares of Black Hills Corp. gapped lower Wednesday morning and ended the week near $28 after the company warned investors to expect sharply lower than expected net income from continuing operations in the fourth quarter. Fourth quarter income is expected to be in the range of 25-30 cents/share, compared to 54 cents/share in fourth quarter 2002 and analysts’ expectations of 55 cents/share.

December gas futures gapped five cents lower at the open on Monday, tried and failed to close that gap, and then ended the day down 12.5 cents to $3.778, just above its daily low of $3.770. Warm weather, high storage levels and forecasts for an El Nino winter appear to be putting downward pressure on the market right now. Some observers already are eyeballing eventual targets near $3.05.