Losses

After gapping lower at the open for the second day in a row,natural gas futures continued to free-fall in lackluster holidaytrading Monday. Weak cash market pricing and a quicklydeteriorating technical picture were cited as reasons for the10.2-cent decline in the November contract. By settling at $2.089,November has dropped over 30 cents in the last three tradingsessions.

The futures market followed an early example set by the cashmarket on Tuesday, as early selling fueled by losses in Monday’sAccess trading pushed the market lower for the second day in row.That enabled the November contract to not only gap lower at theopen, but also to gap below key support at $2.35 on its way to alow of $2.295. However, the buyers saw good value at those levelsand bid up the contract to its settle at $2.346, a 4.7 cent lossfor the day.

The market wasted little time retracing Thursday’s losses inactive trading on Friday by gapping higher on the open beforeexploding upward amid growing concerns of more supply disruptionsdue to storms in the Gulf and Atlantic. The October contract spikedas high as $2.35 on a wave of panicked buying early in theafternoon on Friday as traders were already facing supplyinterruptions associated with Tropical Depression 8. However, byearly afternoon traders were shifting their concern to the lessimminent, but potentially more severe Georges still located in theAtlantic. That allowed traders to take profits ahead of the weekendand October to slip lower. October finished up 12.2 cents to $2.26.

The futures market roared back to life on Monday, nearlyrecouping losses registered on Friday by trading 6.7 cents higherto settle at $1.945. Traders continued to cite a strong technicaloutlook coupled with increasingly bullish fundamental factors as areason for the advances.

Burned so badly that it subsequently got out of the gas andelectric marketing business, LG&E Energy nevertheless has urgedthe Federal Energy Regulatory Commission not to interfere with theinfant electric market by imposing price caps. The marketer, whichhad been among the largest in the business, said the price run-upin June to the neighborhood of $7,000 per MWh for gas deliveredinto Cinergy was part of the “growing pains” of an immaturecommodities market.

AGL Resources Inc., parent of Atlanta Gas Light (AGL) posted anet loss of $1.2 million for the third quarter ended June 30,compared with a gain of $1.4 million for the year-earlier quarter.

The futures market rebounded Friday, recapturing some of thelosses registered earlier in the week as light position squaringearly in the day gave way to moderated short-covering ahead of theweekend. That left the August contract above the critical $2.00level, closing up 8.3 cents at $2.031.

Nymex futures gave an early “head fake” looking to rebound fromlosses registered on Tuesday, but the move was insubstantial,giving way to minor softening before the close Wednesday. That leftthe market still in limbo without a clear signal whether the bottomhad been reached. The August contract slipped 1.7 cents to settleat $1.934 during relatively high volume of 82,830.

The futures market wasted little time continuing lower yesterdayadding to losses registered Wednesday evening following the releaseof the weekly AGA storage report. That report, showing alarger-than-expected 93 Bcf injection gave storage bears somethingto chew on. The August contract opened near its high then tumbled9.9 cents to settle at $2.132 in active trading yesterday.