Mood

Envy instead of glee was the dominant mood among Canadian producers as Alberta natural gas failed to take off when international oil prices shot up into the $100-a-barrel-plus stratosphere.

Envy instead of glee was the dominant mood among Canadian producers as Alberta natural gas failed to take off when international oil prices shot up into the $100-a-barrel-plus stratosphere.

Last week’s sole rally on Thursday proved to be short-lived as a bearish mood returned to the market Friday. Most points fell anywhere from 2-3 cents to half a dollar Friday as a prior-day gain of 21.6 cents by November futures proved no match for weekend warming trends in the South and Northeast and the usual decline of industrial load over a weekend in vying for cash price influence.

After nudging higher in back-to-back range-bound sessions Friday and Monday, the natural gas futures market sprang to life Tuesday as local and commercial traders used chilly weather forecasts as an excuse to bid the market higher. A brief, early afternoon sell-off was just a blip on bulls’ radar and ultimately proved to be an opportunity for them to add to their length at slightly lower levels.

Prices were rising again Tuesday in mostly double-digit amounts, deriving support from a third straight day of screen firmness, a tropical wave nearing the eastern Caribbean Sea and substantial cooling load lingering in the West and South. Then the tropical wave’s promotion to Tropical Storm Claudette that afternoon seemed to assure that quotes would keep going up Wednesday and possibly beyond, according to several sources.

Prices continued to fall Wednesday as the swing market remained in a non-surprising bearish mood leading up to the Independence Day weekend. Growing cooling demand in the South, Midwest and parts of the West was insufficient to overcome the price-depressant effects of a second straight day of futures decline, a load drop-off that was already being felt ahead of the holiday, and anticipation of a storage injection report Thursday morning that could again exceed 100 Bcf.

Coming one day after the Federal Trade Commission (FTC) signed off on its acquisition of the Panhandle pipeline from CMS Energy Corp., Southern Union Co. upped its earnings guidance for 2003 and 2004. Following the news the company’s shares climbed 6.5% on Friday to close at $16.30.

The swing market emerged from the holiday weekend in a decidedly mixed mood. In the East, prices ranged to 15 cents up or down from flat Tuesday, but showed a pronounced bias to the downside. Western points were considerably more bullish, registering moderate gains in most cases but rebounding about a dollar in San Juan Basin and rising 20 cents or more at a few Rockies points.

The December natural gas futures contract was fast out of the chute on its first day as prompt month Wednesday, gapping higher at the opening bell and quickly etching a new high for the week at $4.44. However, scale-up commercial selling was seen throughout the surge and was effective at limiting the market’s upside. December shuffled quietly lower in the afternoon, closing with a 12.8-cent gain for the session at $4.389. Trading was relatively light, with only 69,400 contracts changing hands.