Plummeted

Cash prices plummeted more than 30 cents at some points in the Rocky Mountain region Monday as western pipelines remained packed with gas, and maintenance reduced transportation out of the region. Late reports showed spot price lows in the $1.20s at Opal, WY after averaging in the $1.80s on Friday. Fifty-cent ranges were common throughout the Rockies.

Cash prices plummeted by about a quarter or more nearly across the board Thursday, ignoring an essentially flat screen during the morning that eventually eked out a gain of nearly 7 cents. The market rout had been signaled the day before by a futures dive in response to a larger-than-expected storage injection report, late retreats in Wednesday morning’s cash trading and reports of big drops in both on-line trading for Friday and and rest-of-month baseload numbers.

Murphy Oil shares plummeted 7% ($5.70) Friday to $75.45 after the company issued a profit warning. Murphy was among Wall Street’s 10 biggest losers, while most other energy stocks showed small losses or gains. The El Dorado, AR-based company said after the market closed on Thursday that third-quarter earnings will fall short of analysts’ expectations of $1.12 and would probably be between $0.80 to $1 per share.

Unable to live up to revised storage expectations, the natural gas futures market plummeted lower Wednesday afternoon as traders continued to liquidate new longs. For the third time in three days the September contract tested, but failed to break through resistance in the $3.35-40 area, paving the way for intra- and inter-day profit-taking. The September contract bore the brunt of the selling pressure, spiraling 21.5 cents lower to close at $3.081.

As gas prices plummeted more than $5/MMBtu last week at the Southern California border, conservation, cool temperatures and more long-term contracts pressured power prices lower in the state to the point where generators “are having to compete for first time in months to sell us energy,” Ray Hart, deputy director of the California Department of Water Resources (DWR) said last Thursday.

In three distinct selling waves, natural gas futures plummetedlower yesterday as traders liquidated long positions andestablished fresh shorts amid a bevy of bearish fundamental news.Feeding off losses incurred in the overnight session, the Februarycontract gapped down at the open Wednesday and shuffled lower tothe $7.50 level by 2 p.m. (EST).

Punctuated by a gut-wrenching final 45 minutes in which the spotcontract plummeted, spiked and then fell again, natural gas futuresfinished on a strong note yesterday in a classic short-coveringrally.

Even as cash prices plummeted 25 cents or more for weekenddeliveries the futures screen managed to push higher Friday astraders looked past the unseasonably warm weather outside theirwindows and focused instead on short and medium range forecasts.After a strong opening at $2.56 the December contract caught a waveof technical buying from both trade and local shorts, allowing itto peak at $2.71 before settling up 12.7 cents at $2.649.