Outlooks

With forecasts shifting over the weekend to indicate that cold weather in the East this week will not be as bad as what had been anticipated last week, prices were flat to about a quarter lower in most market areas Monday. However, a few small to moderate gains were mixed into the overall softness, and the Northeast was still getting enough heating load to record strong upticks that reached as high as about 70 cents at Iroquois Zone 2.

Kinder Morgan Inc. (KMI) and Kinder Morgan Energy Partners LP. (KMP) reiterated Tuesday that the companies expect to “meet or beat” 2002 consensus recurring earnings estimates for both the fourth quarter and full-year 2002.

Despite news that only 1 Bcf of gas was pulled from storage last week, the natural gas futures market fought its way higher Thursday as traders remained focused on forecasts calling for colder-than-usual temperatures for the end of November. Light profit taking was seen near the closing bell, but it was not enough to erase the bulk of the day’s gains. December finished at $4.351, up 9.7 cents for the session.

Bullied by revised intermediate-term weather outlooks and feeding off a delayed reaction to supportive storage data issued Thursday, natural gas futures finished the week on a positive note as prices rallied to new two-week highs Friday.

With little in the way of fresh fundamental or technical direction, natural gas futures prices chopped sideways Friday as light short-covering and hot weather forecasts were tempered by lower cash market prices. The September contract worked its way higher throughout the first two hours of trading, but hit the skids late in the session as it fell to its settlement price at $2.858, up 1.6 cents for the session. Estimated volume was light, with only 58,581 contracts changing hands.

Natural gas futures rallied convincingly through much of the trading session Monday, as traders proved they remain unwilling to bet against winter weather eventually taking its toll on price levels. After holding support in the $2.50-52 area for the third session in a row, the December contract shot higher to notch its highest level in more than a week at $2.815. The prompt month finished just off that level at $2.791, up 15.4 cents for the session.

In stark contrast to outlooks released by Salomon Smith Barney and Lehman Brothers last week that predicted natural gas storage would refill at a record pace during the 2001 filling season, UBS Warburg said it would be a challenge for the industry to refill storage to the 2,800 Bcf mark by November (see Daily GPI, April 5; April 6).

Despite cold temperatures both outside and in the latest mediumrange weather outlooks, natural gas prices shuffled lower yesterdayin an extremely quiet trading session. After failing to retestWednesday’s highs yesterday morning, the April contract succumbedto light selling throughout the afternoon. Estimated volume of just32,117 contracts confirmed the thin trading activity.

Fueled by a record-setting storage withdrawal released yesterdayand revised outlooks by both private and governmental weatherforecasters, natural gas futures rocketed higher yesterday toeasily notch new all-time highs.