Observer

A casual observer of Thursday’s futures market might see March’s 4.5-cent decline and $5.74 settle and assume it was another day of light profit taking following a slightly bearish storage report (150 Bcf withdrawal). However, on closer inspection Thursday’s session was anything but “just another day,” with wild price swings, high volatility and a 30-cent trading range.

Looking at sharply higher Northeast prices by themselves, an observer would conclude that Thursday was a rampaging bull market for cash gas. But in the overall market context, non-Northeast quotes ranged from a few pennies higher to as much as 10-15 cents down at some western points. Either side of flat was the rule for a majority of the market.

If the analysis of a top industry observer is correct, prices still have some room left to move higher but little time to do so. As the end of the year approaches, traders should be prepared to recognize that the high prices for the season may be in, he said.

If the analysis of a top industry observer is correct, prices still have some room left to move higher, but as the end of the year approaches traders should be prepared to recognize that the high prices for the season may be in.

If the assessment of a leading industry observer is correct, natural gas prices have fallen to the point where the potential for upside price movement is sufficiently greater than the risk of further declines.

A casual observer of the natural gas futures market might lookat the narrow losses in the January contract and the modest gainsin the out months and conclude there was a quiet, post-expirationtrading lull in the Nymex pit Wednesday. December lost 8.5% of itsvalue in its last two trading days, and traders were just easinginto trading January, right? Wrong.

A casual observer looking back at yesterday’s natural gasfutures trading might take notice of the somewhat narrow 14-centtrading range and not-so-uncommon-lately 12.1-cent prompt monthgain and conclude that Wednesday was just another ho-hum day at theNew York Mercantile Exchange.

A basis blowout of immense proportions has occurred betweenRocky Mountain region supply basins and the Southern Californiaborder this month and it appears to expanding as we enter August,leading to widespread speculation and controversy in the industryabout its causes.

In what one observer described as one of the first “blunders”among energy mergers, Sempra Energy and KN Energy last weekmutually agreed to call off their $6 billion marriage, which wasfirst announced in February.