Only large rallies at Rockies points avoided double-digit losses across the board everywhere else Tuesday as the cash market further softened in response to cooling load declines not being offset by comparable gains in heating load. The previous day’s 15-cent decline by November futures applied additional downward pressure on the cash market.
Rallies
Articles from Rallies
Natgas Futures Push Higher in Concert with Crude
Following a topsy-turvy day of rallies and recesses, May natural gas futures on Monday ultimately recorded a high of $7.590 before settling at $7.562, up 18.1 cents on the day. In commenting on the significant up-day, Commercial Brokerage Corp.’s Tom Saal said the move higher was actually the result of two failed attempts to break below support lines.
Most Prices Up as Hurricane Threat Grows; Expected Path Shifted Toward Southeast LA
Cash prices recorded moderate rallies at most points Friday as revised tracking projections for a much strengthened Hurricane Katrina had the storm approaching more closely to the eastern end of Gulf of Mexico (GOM) production operations than had been anticipated Thursday. But Florida Gas Transmission (FGT) Zone 3, which would be highly susceptible to the impact of Katrina shut-ins, shot up more than $3 on average with peak quotes of $14 being reported.
Despite Little Discernible Support, Most Points Rally
Traders were hard-pressed to come up with any substantive explanation for why cash prices staged modest rallies at most points Wednesday. There was no prior-day screen strength at which to point, and other than a warming trend in the South (destined to be brief) and colder temperatures in Western Canada and the northwestern quadrant of the U.S., the weather outlook failed to provide any rationale for higher quotes.
Monday Rallies Continue, But Size of Gains Recedes
In a now-familiar pattern, prices rebounded at nearly all points Monday by amounts ranging from about a nickel to half a dollar or so. Although cold weather forecasts weren’t able to keep quotes from falling Friday, enough moderate heating load is lingering early this week that along with the return of industrial demand from its usual weekend slump, sellers found no shortage of ready buyers.
Western Rallies Outweighed by General Softening
Major rebounds at El Paso-San Juan and the Southern California border were joined by only the Permian Basin/Waha market and a couple of Rockies points in realizing price increases Monday. Other points ranged from flat to as much as a dime lower, but most of the losses were modest at around a nickel or less.
West, Midcontinent/Midwest Record Small Rallies
Despite all the earlier talk about how mild the weather is turning, markets in the West and Midcontinent/Midwest regions were experiencing or expecting enough heating load to range from flat to up about a dime in most cases Thursday. Gulf Coast and Northeast points continued the previous day’s trend of mild softening, but with a few instances of flat numbers.
Sell-the-Rallies Trading Mentality Deposits Futures Lower Again
Taking back gains achieved in Monday’s rally, natural gas futures fell Tuesday amid waves of fund and local selling. The February contract was hit hardest by the selling, dropping 14.4 cents to finish at $5.107. While natural gas remains in an uptrend — both on the intermediate and long-term charts, traders feel that the longer the market remains range-bound, the greater the potential for a significant downdraft when prices finally break lower.
Dynegy CEO Rallies Investors, Stock Gains 75% in Heavy Trading
For Dynegy Inc., it’s way too early to party down, but the shunned wallflower of the energy merchant sector was more appealing to investors on Tuesday than it has been in months. A record 38.77 million shares were traded before the market closed, sending the cellar stock, which had opened the day at 77 cents, over $1 before noon. It closed at $1.35, a gain of more than 75%.
El Paso’s Wise Rallies Employees Behind Company
In a letter to employees Monday, which was later filed with the Securities and Exchange Commission (SEC), El Paso Corp. Chairman William Wise attempted to dispel any fears that the energy giant was in financial trouble, assuring workers it had about $1.5 billion of readily available cash, a balance sheet and credit profile that were “strong and improving,” an investment grade credit rating, and “adequate financial resources” to meet all of the company’s obligations and to maintain “profitable operations” during the current crisis facing the industry.