Momentum

A political ally, the Northwest Territories government, has stepped forward to try restoring momentum to Canada’s faltering Arctic natural gas project. The territorial government is supporting the C$7 billion (US$5.6 billion) Mackenzie Gas Project so enthusiastically that it is taking a chance on angering one of its biggest constituencies, the Deh Cho aboriginal population along the southern 40% of the proposed Mackenzie Valley pipeline.

Trying to expand upon the upward momentum from Tuesday, March natural gas futures explored higher Wednesday morning. However, after bumping up against the $6.26 level, the prompt month retreated, locating support at $6.10 before settling at $6.165, relatively unchanged from Tuesday.

The natural gas futures market moved higher for the second-straight session Wednesday as traders looked past warming temperatures in the eastern half of the country and focused on increased violence in the Middle East and surging crude oil prices. The February contract closed up 6.1 cents at $6.402 on its first day of trading as the prompt month. January expired Tuesday at $6.213.

Continuing the momentum from Monday’s 50.5-cent slide lower, January natural gas futures probed lower Tuesday on news that a majority of the U.S. might not be subjected to a stretch of below normal temperatures as previously predicted.

The cash market continued this week’s astounding price run-up with growing momentum Wednesday. Gains were even larger than the day before, with several points recording upticks of a dollar or more and virtually all others up by at least 65 cents or so.

Continuing the downward momentum from Friday, the July natural gas futures contract dropped 18.1 cents on Monday to close at $6.339. Rumors of a break from trading with crude futures appeared false for the time being, as July crude fell as well, closing $1.12 lower on the day at $37.63.

Those who suspected Thursday that the week’s upward price momentum was starting to fade go to the head of the class. After four straight days of rising quotes at nearly all points, softness set in Friday across the board. Declines ranged from about a nickel to a quarter, with a majority being in the teens.

With nearly all areas outside a strip along the Gulf Coast and parts of the Southwest doing some serious chilling out Tuesday, prices again made big gains. Although the Northwest relaxed a bit from the dollar-plus upticks it had seen Monday, Tuesday’s strength was more solidly based because of significantly larger advances in non-Northeast markets and a lack of weakness in the West.

Stemming two months of slow, downward price momentum, the natural gas market turned abruptly higher Monday as traders received a one-two weather combination punch. In addition to the first blast of cool weather descending on parts of the Northeast over the weekend, the futures market was bullied higher by longer-range forecasts calling for below-normal temperatures this winter in the East. With that the November 2003 contract made its debut as prompt month in ostentatious fashion, gapping higher at the opening bell and advancing 27.4 cents to close at $4.895.