Nowhere

It’s no secret that weak prices have made natural gas a stepchild to oil and natural gas liquids (NGL), but perhaps nowhere else is the clean-burning stuff more out of favor than in the halls of Houston-based EOG Resources Inc., where CEO Mark Papa can’t seem to distance himself from the Mcfs fast enough.

A large majority of points was softer for the weekend, and although moderate gains continued at several Northeast points Friday, they were nowhere near the triple-digit spikes that had reigned in the previous two days. In fact, a few Northeast points showed softness of their own. Transco Zone 5 (Mid-Atlantic) took the biggest dive of a little more than $1.40.

While Thursday’s reported 58 Bcf natural gas storage injection for the week ended Sept. 5 came nowhere close to the 102 Bcf and 90 Bcf builds of the previous two weeks, it came in slightly above some industry projections, which were set based on significant shut-ins from the Gulf of Mexico related to Hurricane Gustav. Following the bearish build, October natural gas futures spiraled lower.

Just when it seemed that cash prices had nowhere to go but down for quite a while, the market achieved a rally Thursday — sort of. Actually it was only a partial rally, as quite a few instances of flat quotes were scattered among points that were mostly less than a dime up or down from flat.

Natural gas futures took a long road to nowhere Thursday as prices moved to either side of the recent trading range on waves of local and commercial liquidation and short-covering.

Much of the cash market “followed the screen” essentially nowhere as flatness dominated at a majority of points Thursday. However, there were pockets of price movement here and there. The Northeast and PG&E-related California points weakened by as much as the teens, while San Juan/Rockies/Pacific Northwest quotes rose by a nickel or more. In addition, several scattered Gulf Coast and Midcontinent points defied the overall flat trend with upticks or downticks of up to a dime.

Although it was nowhere near as dramatic as the price move thatdeposited prices near all-time winter lows, last week’s futuresgains-slowly and steadily-were gaining the attention and acceptancefrom both technical and fundamental traders. And despite a largestorage surplus and continued uncertainty about winter weather, ifprices are able to trend higher into the New Year, the market willlook back at last week’s rebound as the end of the downtrend. Theprompt January contract chopped higher Friday, making daily highsby noon before softening into the closing to finish up a penny at$2.074.