Pennies

Wednesday’s increase of a couple of pennies proved to be a mere pit-stop for natural gas futures rather than a change in market direction as the December contract resumed its larger downward slump on Thursday.

Falling into a rather well worn pattern, June natural gas futures Thursday expanded the upside of the recent move by a few pennies before crashing back down to earth. The prompt-month contract notched a $11.428 high in the minutes that immediately followed the natural gas storage report’s release before retreating to close at $11.263, down 6.4 cents from Wednesday.

Cash traders on Wednesday watched most delivery point averages across the country slip by a few pennies to nearly 40 cents, but afternoon news of a pipeline-impacting explosion in the Gulf of Mexico could rattle some cages on Thursday.

The bearish move of the last week was able to squeeze a few more pennies out Tuesday as the July natural gas futures contract — which expires Wednesday — reached a low of $6.840 before settling at $6.877, down 6.3 cents from Monday’s close. Over the last seven regular trading sessions (all losses), the prompt month has shed $1.041.

Although most of the cash market remained in softening mode Thursday by recording losses ranging from a couple of pennies to more than 80 cents, several areas had points in the mix that were flat to as much as nearly a quarter higher. Sources suggested that the scattered rebounds and eventual screen strength were tied to growing perceptions that Hurricane Katrina-related Gulf of Mexico (GOM) shut-ins could rival those of 2004’s Hurricane Ivan for longevity.

Spot prices inched higher by a few pennies to a little more than a dime at most locations nationwide Monday compared to weekend levels, and basis tightened a bit with help from the 10.5-cent drop in near-month futures. But many observers still were left wondering how the huge basis chasm will be closed before the November contract goes off the board.

Natural gas marketers might save a few pennies on each trade by doing their business online rather than over the phone, and they probably will handle more volume, but at some point in time it’s going to come back to haunt them, said Kevin Huntsman of Mastio & Company. Mastio just released its fifth customer satisfaction ranking of gas marketers, and the results are a little scary for many of the mega marketers, who boast about huge gas volumes but often have very few satisfied customers.

Natural gas marketers might save a few pennies on each trade by doing their business online rather than over the phone, and they probably will handle more volume, but at some point in time it’s going to come back to haunt them, said Kevin Huntsman of Mastio & Company. Mastio just released its fifth customer satisfaction ranking of gas marketers and the results are a little scary for many of the mega marketers, who boast about huge gas volumes, but often have very few satisfied customers.