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In a textbook example of why traders eschew short positions heading into a holiday weekend, natural gas futures erupted higher Tuesday, as a combination of fund and local buying drove the market up 9% to match recent highs. After gapping higher at the open, the March contract wasted precious little time yesterday as it moved above its 40-day moving average in the first 10 minutes of trading. Buyers did not once look back, boosting the prompt month to its highest close since Jan. 2, up 19.1 cents at $2.397. At 111,562, heavy estimated volume served to punctuate the price move.

Despite languid cash market prices and plentiful supply heading forward, natural gas futures exploded higher Friday as traders covered shorts and squared their books ahead of the four-day holiday weekend (some cash traders admitted having to work a half-day Monday, but the futures market will remain closed until 7 p.m. EST Christmas Day for Access trading and until 10 a.m. Wednesday for regular pit trading). By virtue of its 20.9-cent rally and $2.895 closing price, the January contract broke to new three-week highs Friday, and moved above the February contract for the first time since Nov. 2. Heavy trading activity punctuated the move, with 116,361 in estimated volume.

For most of the summer, there has not been severe heat in the eastern half of the United States, but that could change by early next week, according to Salomon Smith Barney Meteorologist Jon Davis. With the presence of significant heat to trigger increased power generation for cooling demand in the Northeast, the strong tide of weekly storage injections could weaken a little.

While winter weather finally made an appearance in the Northeastand Midcontinent last Friday, major price movement in most marketareas did not. Sources in the Midcontinent and Northeast citedweather forecasts calling for major temperature warm-ups for thisweek as the major reason for the market’s inability to rise.

The New York Mercantile Exchange said it will move electricitytrading from open outcry to the Nymex Access electronic tradingsystem following the close of trading March 2. At the 4 p.m. startthat day of the Access session, which marks the start of the March3 trading session, the Exchange will list all of its existingelectricity futures and options contracts for trading on the systemthrough 2:30 PM the next day. The contract will begin trading at 4p.m. Monday through Thursday evenings and will begin trading at 7p.m. Sundays.

The New York Mercantile Exchange said it will move electricitytrading from open outcry to the Nymex ACCESS electronic tradingsystem following the close of trading March 2. At the 4 p.m. startthat day of the ACCESS session, which marks the start of the March3 trading session, the Exchange will list all of its existingelectricity futures and options contracts for trading on the systemthrough 2:30 PM the next day. The contract will begin trading at 4PM Monday through Thursday evenings and will begin trading at 7p.m. Sundays.

The futures market gave the impression it was heading higheryesterday when February opened at Tuesday’s high and quickly tradedto $1.85. But the selling dried up, leaving the market vulnerableto light selling for the rest of the session. The February contractclosed down 5.1 cents for the day at $1.77.