Opening

U.K. gas traders have an unusual situation on their hands. The opening of the Langeled pipeline between Norway and the United Kingdom last weekend has flooded the market with supplies and pushed prices below zero. That is, sellers are paying buyers up to 5 pence/therm for the privilege of “selling” their gas.

October gas futures gapped 10 cents to the upside at the opening bell Tuesday, leading some to believe a solid bounce would continue higher off Monday’s significant $5.440 low, the lowest a front month has traded in nearly two years. However, the front-month contract reversed course in morning trading and ended Tuesday down 9.6 cents at $5.574, just above a daily low of $5.560.

After posting a higher high just after the opening bell at $7.100, the September gas futures contract lost significant ground Wednesday, dropping all the way to $6.590 by early afternoon before rebounding slightly toward the end of the session. September ended the day down 9.5 cents to $6.766/MMBtu.

The Bush administration favors opening up additional oil and natural gas resources for development on the Outer Continental Shelf (OCS) and would support an “appropriately structured revenue-sharing” plan with energy-friendly coastal states, an Interior Department told a House committee Wednesday.

After gapping lower at the opening bell, the natural gas futures market clawed its way slowly higher throughout the trading session on a combination of technical short-covering and bargain hunting. April finished at $7.067, down 22.3 cents for the session but up more than 13 cents from its early-session low of $6.93.

Without much new information to trigger a significant change, April natural gas futures gapped lower at the opening bell to $6.740 in response to the continuing heavy storage inventory situation, but then managed a slow climb throughout the day Tuesday to end up 3.3 cents at $6.868. April crude seemed to move almost in lockstep, initially dipping to $59.60 but then ending the day up 15 cents at $60.57/bbl.

After throbbing drums, wailing fiddle reels and whirling dancers provided a stirring opening in Inuvik Jan. 25 to Canadian northern pipeline hearings, a pro-development regional majority wasted no time in telling the reluctant minority to get in step.

After opening 62.1 cents lower than Wednesday’s settle, January natural gas futures prices collapsed $1.348 on Thursday to end the day at $12.923, leaving many market experts dumbfounded. The Energy Information Administration (EIA) reported a lower than expected 162 Bcf storage withdrawal, but it was still a big storage drop by historical standards.

After opening on Wednesday 28 cents lower than Tuesday’s settle, January natural gas quickly found support at $13.630 before exploring higher. Fluctuating weather reports and storage uncertainty allowed traders to push the prompt month to the day’s high of $14.400 before closing a few minutes later at $14.271, up 19.1 cents on the day.