Opinions

After sailing 27.5 cents higher in a three-day price advance last week, natural gas futures hit the buying doldrums Friday as traders elected to liquidate new positions rather than go home for the weekend long and risk an adverse price move Monday. The dissipation of Tropical Depression 2 prompted a mammoth 4-cent gap lower open and the August contract never recovered, closing 17.8 cents lower for the day at $3.25. Estimated volume was relatively light as only 52,913 contracts changed hands.

Ask two traders about the direction of the natural gas futuresmarket and you will likely get two different opinions, and that wasnever more true than last week when Tom Saal of Miami-based PioneerFutures and Tom Riley of Riley Natural Gas spoke about hedging forproducers at GasMart/Power 2000 in Denver.

Traders’ opinions have varied as to the direction the futuresmarket would take this week, and so it came as no surprise Mondaywhen it tested both the upside and the downside in early trading.But, when selling dried up below the $2.10 level, the Novembercontract was free to migrate higher to settle at $2.143.

The futures market opened lower on Thursday, but aftersustaining an initial round of selling, the prompt month managed toclaw its way back up to $1.817, a 0.2 cent decline for the day.That left the September contract still perched just above long term support at $1.78 yesterday, trading within a narrow 4-cent range.Estimated volume registered an unremarkable 40,943.