Holiday

Coming off the long holiday weekend, natural gas futures traders decided to give the upside a try on Tuesday. Gaining support from a host of factors including colder weather and strength in the crude futures arena, March natural gas soared to a high of $7.770 before settling at $7.731, up 54.9 cents on the day.

Some Northeast citygates peaked above $9 and realized dollar-plus increases Friday amid gains at nearly all points in trading for the holiday weekend. That was hardly surprising with freezing weather due throughout Canada and most of the U.S. And for a change cash prices had prior-day screen support to set against the usual extra decline of industrial load during a long weekend.

Due to customers banking more than 300,000 dekatherms on its system over the holiday weekend, Kern River posted a critical notice barring banking Monday morning. The practice persisted, however, with the pipeline projecting the banking amount at 200,000 dekatherms for Tuesday’s gas day. Citing the threat to system operations, Kern River looked at actual flows as of 4:15 p.m. MCT Tuesday and assumed a uniform hourly flow for the remainder of the gas day. Based on that analysis, capacity at Kern River meters was reduced to meet the assumed uniform hourly flow in the Intraday 2 nominations cycle. In an update Wednesday, Kern River said linepack remained at a critically high level and that it “will continue to compare scheduled quantities to actual deliveries and will take appropriate action to reduce unauthorized banking.”

Abandoned by members of Congress, who left a lot of low-income energy users out in the cold as they headed for their own home holiday fires, natural gas end users are turning to federal agencies to stem the tide of high prices.

Calpine Corp. and the independent power industry hope to catch their collective breath over the holiday week after the power plant poster child charts a new future in its $27 billion Chapter 11 bankruptcy in federal court in lower Manhattan, not far from Wall Street where it once basked in a Google-like aura in the late 1990s.

Following the long holiday weekend, traders on Monday wasted virtually no time getting their positions across as the December natural gas futures contract plummeted on its final day. After burrowing below the $11.030 support level (from Nov. 7) to record a trade at $10.880 just before 1:30 p.m. EST, the expiring prompt month rallied to go off the board at $11.180, down 44 cents for the day.

While petroleum futures decisively explored lower on Tuesday following the Labor Day Holiday weekend, October natural gas was a little more undecided as traders began to monitor Tropical Depression 16 (TD 16) off the coast of Florida. After venturing both higher and lower during the course of the day, prompt month natural gas ended up settling 3.4 cents lower for the session at $11.657.

While the entire petroleum futures complex saw large declines in a holiday-shortened trading session Friday, October natural gas futures ended up settling at $11.691, just 6.6 cents lower than Thursday’s settle but $1.885 greater than the previous Friday’s close. With small amounts of natural gas production returning to the Gulf of Mexico, questions as to the extent of the damages and the duration of shut-ins still remain.

As expected, natural gas cash market prices rallied back from losses experienced ahead of the holiday weekend as a number of NGI’s daily price indices registered double-digit advances. The troika of discontinued pipeline OFOs, early strength at the Nymex and a modestly bullish weather outlook were factors leading to the price increases, although traders also were quick to question the size of the advances. July futures finished the session at $6.379, up about a penny on the day.