Impress

The upgrade of a tropical wave in the southern Bahamas to Tropical Depression 3 (TD3) was almost a given during cash business Thursday, but it didn’t seem to impress traders. Neither did a heat wave forecast for the South and highs reaching the low to mid 90s in parts of the Midwest and Rockies.

A continuing heat wave in much of the eastern U.S. failed to impress the market Wednesday. It fell at nearly all points as a low-pressure area in the western Gulf of Mexico (GOM) appeared unlikely to disrupt offshore production.

Atlanta-based IntercontinentalExchange Inc. (ICE) continues to impress the financial world as the electronic energy marketplace and soft commodity exchange was just named the best performing stock over 2006 among 1,000 companies in the Wall Street Journal’s (WSJ) annual Shareholder Scoreboard. ICE also posted new volume and commission records during February.

Atlanta-based IntercontinentalExchange Inc. (ICE) continues to impress the financial world as the electronic energy marketplace and soft commodity exchange was just named the best performing stock over 2006 among 1,000 companies in the Wall Street Journal’s (WSJ) annual Shareholder Scoreboard. ICE also posted new volume and commission records during February.

Rescinding gains made shortly after the opening bell, the natural gas futures market was sent lower Thursday morning by traders unimpressed with government estimates suggesting that 134 Bcf was pulled from storage last week. However, after bottoming out at $6.75 shortly before 11 a.m. EST, the January 2004 contract — boosted by supportive weather and cash prices — mounted a sustained rally that resulting in its second-highest-ever settlement price. It closed at $7.122, up 12.9 cents for the session.

Unfazed by storage data showing stocks decreased by 1 Bcf during the week ending Nov. 21, the natural gas futures market shifted lower Wednesday, as a local trader-led rally was crushed by another round of bearish weather forecasts. The January contract stair-stepped lower in two distinct selling surges. When the dust had settled and the orders were counted at Nymex, the prompt month had slipped 12.5 cents to close at $4.925 on its first day in the limelight.

In a surprising show of strength considering the weak underlying cash prices and a bearish storage report (7 Bcf injection) announced Thursday morning, natural gas futures rallied back to the mid-$5.20s late Thursday morning. However, buying dried up for the expiring April contract and sellers were waiting to push it lower at the closing bell. At $5.146, April completed its tenure as prompt month up 4.9 cents on the day, but down 30% since becoming prompt month. The new prompt month, May, surged 9.3 cents to close at $5.24.

After dropping a dime in a knee-jerk reaction to slightly bearish storage data (42 Bcf injection) released at 10:30 a.m. EDT, natural gas futures chopped sideways for the rest of the session Thursday as traders groped for fair value in a market that has witnessed a 58-cent trading range since Oct. 1. As it turned out, nothing was settled, with about half the traders, brokers and analysts surveyed by NGI yesterday expecting higher prices Friday and half looking for more weakness. The November contract closed at $3.828, down 9 cents for the session and just above support at $3.795.

Amid three distinct selling surges, natural gas futures returned to pre-hurricane (Isidore and Lili) levels Thursday as traders grappled with a one-two combination of bearish news. The first blow came before the open when traders learned that Hurricane Lili had weakened prior to landfall. Still reeling from that, traders were again stymied upon learning that a greater-than-expected 47 Bcf was injected into storage last week, according to the Energy Information Administration. Then after holding support at $3.78 for much of the afternoon, the November contract broke lower in the final 30 minutes of trading. It closed at $3.724, down 43.6 cents for the session and more than 50 cents beneath its $4.25 peak notched during the height of the hurricane hype Tuesday.