Nickel

All cash points retreated Wednesday within a range of about anickel to 20 cents, with most declines occupying the middle groundat 8-15 cents. Sources attributed the softening to the screen’sweakness a day earlier, a general dearth of cooling load, anddoubts about production risks from downgraded Tropical Storm Debby.

After dropping a quick nickel in Thursday’s after-hours Accesstrading session, natural gas futures did an about-face Friday astraders learned of the first named storm in the 2000 Atlantichurricane season. The September contract was fast out of the chute,notching a gap-higher open on the daily charts and climbingthroughout the morning. However, after reaching fresh five-weekhighs at $4.39, it came under steady profit taking, which trimmedgains into the closing bell.

After three consecutive days of increasing prices, the next fivenatural gas futures contract months on the New York MercantileExchange each dumped 5-6 cents yesterday, showing a little weaknessand slightly less volatility than average over the past coupleweeks. The downticks illustrate the continued uncertainty regardingthe long-term direction of the market.

Boosted by a more than a nickel increase in during the overnightAccess trading session, followed by a second straight day of higherearly morning over-the-counter dealings, natural gas futures werequick out of the chute Tuesday as traders set their sights onceagain on the key $4.00 level. But just like Monday, yesterday’searly buying quickly turned into profit-taking when it becameapparent $4.00 was beyond bulls’ reach. The June contract finished6.7 cents stronger at $3.814, after trading within a tight,8.5-cent range.

Most of the cash market ranged from flat to a little over anickel higher Monday, but that mild showing of firmness isn’texpected to survive into today.

The weekend cash market followed the script written for it byfalling between between a nickel and just over a dime at nearly allpoints Friday. It was a “typical” low-demand period phenomena,according to one marketer; another, phrasing it slightlydifferently, called it “just the usual weekend blowout.”

Cash prices continued climbing by another nickel or more at mostpoints Wednesday, but traders sensed the market might have peakedfor the first week of the May aftermarket. They cited late dealsbeing done several cents below the early-morning highs. And the AGAstorage report of 34 Bcf in injections last week, although it cametoo late to affect Wednesday’s cash business, was regarded by manyas contributing to a more bearish mood. One source characterizedthe figure as “kind of middle of the road” (because it met theexpectations of many) but leaning slightly to the bearish side. Heand others noted the drop in Access futures prices after the reportcame out.

The March futures contract lost 5.3 cents to settle Wednesday at$1.765, thanks to what sources believe was a combination of weaktechnical and fundamental factors. “Today’s drop in the Marchcontract was actually a response to a failure at the 18-day movingaverage for March of $1.824,” one trader said, although otherschimed in many people sold ahead of what they thought would be abearish AGA storage report. Sure enough, the actual report came inat 78 Bcf of withdrawals, which is “significantly” lower than the102 Bcf of gas withdrawn during the same period last year.

Wednesday’s cash market was almost a carbon copy ofTuesday’s-flat to about a nickel higher at the great majority ofpoints but going lower in the Rockies. About the only differencewas in California numbers, which were flat to slightly higherWednesday instead of joining the Rockies in softening.