To say the weekly storage report has had an impact on thenatural gas futures market lately would be a gross understatement.Following an impressive 69 Bcf injection on Sept. 1, the futuresmarket dropped 26.6 cents the very next day. Then a week later,following the release of a relatively small 66 Bcf refill, themarket took a wild, 24-cent ride higher to close the session in themid-$2.80s. Now, a week later the question that everyone is askingis whether we will see another big move today. At first glance theanswer to that question was a resounding “yes” because shortlyafter the storage figures were released the October contracttumbled a dime lower in after-hours Access trading.
Lately
Articles from Lately
Strong Screen Back in Vogue as Cash Influence
Traders resurrected a phrase they hadn’t been using very muchlately: “following the screen.” Like a rising tide that lifts allboats, the Henry Hub futures contract for September turned in astrong performance Wednesday and spurred moderate firmness in cashnumbers. In the absence of substantial change in marketfundamentals, there was little besides the Nymex pit for cashguidance, a marketer said.
Has the Rally in Futures Prices Run Its Course?
Although many signs have been pointing to a major rally infutures prices lately, Wednesday’s trading at the New YorkMercantile Exchange just may put an end to that talk. Aftermanaging to rise above key resistance at $2.50, the spot Augustcontract saw major selling by funds and locals, so much so thatAugust fell to a low of $2.41 before settling the day down 1.9cents at $2.450.
Short Covering Prompts Nymex Spike
Tuesdays and Wednesdays have been quiet lately at the New YorkMercantile Exchange with traders, brokers, and marketers waitingcalmly in anticipation of the weekly AGA storage report. In fact,since the end of April, daily changes to the spot month contract onthose days have been small, averaging slightly more than 3 centswith no change greater than 8 cents. However, this is natural gasand just when you think you have things figured out, it throws youfor a loop. This week, July plummeted on Tuesday to the tune of11.1 cents only to rebound 18.5 cents on Wednesday. That left thespot month at $2.174 at the close of the regular trading sessionWednesday afternoon.
Downturn in Doubt as Bulls Regroup
Bulls have had very little if anything positive to talk aboutlately with respect to gas prices at the New York MercantileExchange. Mild June temps, a healthy storage level, and amplesupply have weighed on the market since the current downtrend beganon April 9th. So it comes as no surprise that upon the release ofthe less-than-expected 86 Bcf AGA storage injection, bulls sawtheir first opportunity in a while to push the market higher. Thefirst thrust was registered in Wednesday night’s ACCESS session.Then, after opening higher yesterday, the contract traded in a neat5-cent trading range settling at $1.970, up 4 cents for the day.
July Futures Plumb Near $2.00
In what has become almost routine lately, the AGA’s report ofstrong injections into storage caused a wave of follow-throughselling Thursday. A lower open allowed the contract to slip beneathsupport to settle at $2.02. In doing so, the July contract fell anadditional 8.6 cents to settle at the contract’s lowest point since1997.
July Debuts By Retracing Some of June’s Losses
Thursdays have been a bearish trader’s best friend lately withthree of the last four featuring follow-through selling on theheels of some hefty storage refill estimates. However, yesterdaydid not follow true to form, as traders digested alarger-than-expected 92 Bcf American Gas Association storage refillestimate then managed to push July up 2.5 cents to settle at$2.071. In doing so, several traders remarked, July exhibitedJune-like characteristics marked by narrow trading ranges amidrelatively low volume. June looked to expire without much fussearlier in the week, then the bottom dropped out on the last day.It “looks as if that was more a case of people liquidatingpositions then anything,” a trader reasoned.