Ignore

After enjoying a one-day national rebound in natural gas cash averages on Thursday, values were tugged lower on Friday as traders were unable to ignore Thursday’s futures plunge.

Unable to ignore the 22-cent hike in April natural gas futures values on Thursday, cash point averages across the country followed suit on Friday with upticks mostly between a dime and 20 cents.

Even with crude futures flipping back to gains on Friday, natural gas futures traders were unable to ignore their own commodity’s dour fundamentals going into a demand-reducing holiday weekend. The June contract tested support at $3.500 before closing at $3.515, down 8.8 cents from Thursday’s close and a whopping 58.3 cents lower than the previous week’s finish.

After appearing to ignore bearish weather fundamentals in registering price gains at all or nearly all points for nearly a week and a half, the cash market had finally shown signs of cracking Wednesday with mostly small losses at a majority of points. The price dam broke Thursday as substantive double-digit losses occurred across the board.

With continuing pressure on natural gas and oil prices, producers are rethinking how to budget their capital expenditures (capex), but they shouldn’t ignore the “obvious” ways to succeed in the current economic downturn, according to a report by UK-based consultancy Arthur D. Little (ADL).

With continuing pressure on natural gas and oil prices, producers are rethinking how to budget their capital expenditures (capex), but they shouldn’t ignore the “obvious” ways to succeed in the current economic downturn, according to a report by UK-based consultancy Arthur D. Little (ADL).

The cash market decided to ignore the slow pace of offshore production recovery from the one-two punch of hurricanes Gustav and Ike and instead focused on the overall lack of weather-based demand for those missing supplies Friday. Abetted by the previous day’s 28.9-cent decline in October futures and the weekend dropoff of industrial load, the weakness of weather fundamentals drove all but a few Texas points lower. Just as there were quite a few triple-digit increases on Thursday, several points saw drops of about a dollar or more Friday.

After a one-day price hike, natural gas futures slid back down to early week levels Wednesday as traders chose to ignore a rally in crude oil and sided instead with bearish intermediate-term weather forecasts. The March contract closed at $6.109, down 6.6 cents for the session and well within the market’s recent $5.95-6.48 trading range. By comparison, March crude notched new three-week contract highs and settled at $48.33 per barrel, up $1.07 on the day.

Natural gas futures fell sharply in abbreviated pre-holiday trading Friday as technical selling apparently outweighed concerns over the development of several tropical systems. The October contract finished its second session as prompt month on a negative tone, dropping 21.3 cents to close at $4.731.