Range

After etching out a wide, 20-cent trading range Monday andTuesday, natural gas futures traded sideways yesterday in a rare,low volume and low volatility trading session. Little in the way offresh news was seen to nudge prices in either direction, leavingthe November contract to slip 2.9-cents to $2.978 in pre-AGA profittaking. Estimated volume was an extremely-light 53,060 contracts.

Following a spectacular, 24-cent price spike Thursday, thenatural gas futures market cooled its heels Friday as traders tookprofits rather than spend the weekend long. That allowed theOctober contract to sift a nickel lower to $2.801 in an active114,602-volume session.

The natural gas futures market made it a ‘perfect ten’ yesterdayby trading within a tight 14-cent range for the tenth consecutivetrading session. The August contract showed promise early, racingout to a strong start and posting a $2.239 high. That, however,would be the best the market could do Tuesday. It then wilted underselling pressure in the afternoon. The prompt month finished at$2.198, down 0.9 on the day.

After a choppy week of range-bound trading, bulls foundthemselves in the driver’s seat Friday at the New York MercantileExchange when weather forecasts and technical factors came intoagreement. Given the opportunity it didn’t take long forspeculators, comprised mostly of local traders, to become buyers inan attempt to push the August contract through resistance tobuy-stop orders that they knew were waiting in the $2.21-22 area.However, what they failed to realize was that there wasconsiderable commercial selling waiting there as well, it proved tobe more than enough to satiate the buying demand. The Augustcontract notched a $2.225 high shortly after 1 p.m. (EST) only tocome crashing back to settle at $2.187, an 0.8-cent advance for thesession.

Without any impetus to break in either direction, natural gasfutures continued to subsist on a steady diet of range-boundtrading yesterday at the New York Mercantile Exchange. But incontrast to Tuesday’s session, which featured the market closingnear its high trade for the day, Wednesday’s session was dominatedby selling that ushered the prompt August contract down 3 cents to$2.146. Estimated volume was light, with only 44,985 contractschanging hands.

A tight range and relatively quiet trading returned to thenatural gas futures pit on Monday following last Friday’s failedrally that briefly touched overhead resistance. And althoughyesterday’s highs did not approach the $1.875 notched last week,some traders felt the move was constructive for prices. Theprompt-March contract was limited to a 1.8-cent gain to finish at$1.818 for the day.

The futures market continued to trade sideways to finish out theweek on Friday despite the large bearish sentiment, underpinned byfundamentals, that continues to dominant the market. The Septembercontract may have slipped only slightly to settle at $1.947, but itwas not for a lack of trying. Friday produced very choppy tradingthat had the prompt month bouncing between the $1.90 and $2.00.

The futures market opened stronger Wednesday, and looked poisedto remain range-bound ahead of the weekly American Gas Association(AGA) storage report. But a crowd of sellers came out in theafternoon, sending the September contract down 6.8 cents to $1.917.Estimated volume was 83,479.

Lacking much else in motivational factors beyond Tuesday’sfutures dive, cash prices softened Wednesday as expected.Across-the-board decreases ranged from barely a penny to as much asa dime. A Midcontinent marketer was surprised the drops weren’t anygreater than 2-5 cents in her region.