Plummeted

October natural gas futures values plummeted on Monday after the three hurricanes on the radar Friday all chose a more northerly path over the weekend, sparing the Gulf Coast and U.S. energy interests yet again. Another theory is that the back and forth trading of the last week reflects the normal ebb and flow of a range-bound market. The prompt-month contract Monday reached a low of $3.806 before closing out the regular session at $3.822, down 20.2 cents from Friday’s finish.

After venturing above $4 in early Thursday morning trading for the third consecutive session, October natural gas futures plummeted back to earth after the Energy Information Administration (EIA) reported that 103 Bcf was injected into underground storage for the week ending Sept. 10. However, the dip was short lived as the recent bull move prevailed.

Proving Monday’s 49.1-cent gain was all bark and no bite in the momentum category, December natural gas futures on Tuesday plummeted as global economy concerns continue to raise questions about commodity demand strength and weather forecasts continued to shift. The front-month contract ended up closing Tuesday’s regular session at $6.705, down 54.3 cents from Monday’s finish.

Shares in Baltimore, MD-based Constellation Energy plummeted Tuesday on worries over the company’s relationship with bankrupt Lehman Brothers Holdings Inc. and fears that Constellation could lose its credit lines. The New York Stock Exchange halted trading in Constellation shares just before 2 p.m. EDT.

While some industry experts had expected traders to get back to the business of storm concerns Friday after October natural gas futures plummeted more than half a dollar Thursday on a stout 102 Bcf storage injection, those predictions proved unfounded. Even as Gulf of Mexico evacuations and shut-ins continued ahead of Hurricane Gustav, and concerns related to Tropical Storm Hanna grew, the prompt-month contract ended up dropping 10.7 cents to close at $7.943.

Sparked mostly by a round of crude weakness and U.S. dollar strength, August natural gas futures plummeted following the long holiday — breaking beneath psychological support at $13 along the way. The prompt-month contract recorded a low of $12.874 before going on to settle at $12.977, down 60 cents from Friday’s finish.

In a move reminiscent of similar extreme weakness in early June, most Rockies points plummeted by more than a dollar Monday and saw low-end quotes dip to less than a dollar. However, the price carnage wasn’t quite as severe as on the trade date of June 4 (see Daily GPI, June 5) when a CIG deal at 15 cents tied NGI’s all-time lowest quote.

Prices fell by large amounts at all points Monday, and the market carnage is expected to continue Tuesday after September futures plummeted by nearly a dollar when it became apparent that powerful Hurricane Dean is nearly certain to pass well to the south of U.S. offshore production interests. Cooling load was still strong in the South and Southwest, but it remained too moderate in the Northeast, Midwest and other parts of the West to lend much support to the cash market.

March natural gas futures plummeted 60.1 cents Monday to settle at $7.226 as traders continue to discount pervasive cold weather throughout the East and Midwest while focusing on seasonal and technical factors.