Prompted by weaker physical prices and forecasts calling forwarming temperatures this week, traders in the natural gas pit atNymex had little choice but to push futures lower Friday as theycasually transferred long positions from the prompt contract to theback months. Slipping 6.6 cents on the day to finish at $2.785, theApril contract now sits just above trendline support on the dailychart, sources said.
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Despite double-digit physical market increases and an earlyretest of the $2.80 level, natural gas futures tanked yesterday astraders weighed the impact of warm weather forecasts for the firstpart of October. After holding in the high $2.70s for most of themorning Monday, the November contract was hit with a round ofselling in the afternoon that pushed the price 16.8 cents lower toclose at $2.625.
Buoyed by strong demand for physical supplies and aggressivebuying under last week’s price chart gap, the natural gas futuresmarket continued to whittle away at last week’s collapse. Theremaining three months of the millennium received almost equalbuying interest Tuesday, with October, November and Decemberadvancing 11.6, 11.9, and 11.6 cents respectively. Estimated volumewas hefty, with 81,210 contracts changing hands.
Buoyed by another day of strong demand in the physical market,the futures market trended higher Friday in a choppy, range-boundtrading session. After opening just two pennies above Thursday’slow of $2.67, the September contract rumbled 2.2 cents higher onthe day to finish at $2.745.
For the second day in a row Friday, the futures market was ableto shrug off sizable losses in the physical market to trade oneither side of unchanged. No fresh news was seen to inspire theNovember contract outside its unusually narrow 3 cent trading rangeand the market was left to settle at $2.164, a 1.2 cent loss forthe day.