Rebound

After holding support following a knee-jerk downward reaction to the latest industry supply data, natural gas futures vaulted higher in two distinct buying surges. The first rally consisted of a move back above $3.30 that came on the heels of the 10:30 a.m EDT storage report. After a brief siesta, bulls were running Thursday afternoon, lifting prices convincingly higher into the close. October finished at $3.342, up 14.9 cents for the day and 24.2 cents above its early-session low.

Buoyed by renewed tropical storm concerns and in sympathy with higher crude oil prices, natural gas futures rebounded modestly Wednesday as traders covered shorts and added to their length ahead of the release of fresh storage data Thursday. However, the day’s gains were cast in doubt by a late sell-off following the market’s failure remain above Friday’s $3.25 low. At $3.193 the October contract was nearly a dime off its $3.29 high, but still up 6.1 for the session. Crude gained 48 cents to close at $28.27. Estimated volume in the gas pit was heavy with an estimated 90,435 contracts changing hands.

After dropping 14.2 cents and coming within striking distance of its 40-day moving average at $2.25 on Monday, March natural gas futures rebounded yesterday as last-minute position squaring by fund and local traders was enough to promote the contract back above the $2.40 mark in the final minutes before the contract’s expiry. March’s final settlement, which is computed by averaging the last 30 minutes of trading, was $2.388, up 8.1 cents for the session and 32.1 cents higher than where it was when it began its tenure as prompt month back on Jan. 29. By comparison, the buying in the out months was more conservative, leaving the 12-month strip with a modest 3.4-cent gain to finish at $2.73.

After spending precious little time in the $1.80s Monday, February natural gas futures bubbled higher on expiration day yesterday as a late round of local short-covering boosted prices back above the $2.00 mark. By virtue of its 9.8-cent gain and $2.006 final settlement price, the February contract managed to avoid last October’s fate of a sub-$2.00 closing price. Volume was normal for an expiration day with 129,016 contracts changing hands.

Shrugging off Thursday’s expiration-day sell-off, natural gas futures rebounded Friday, as traders took their cue from cold weather expected over the weekend and stronger cash market prices. The newly-crowned spot month February received the biggest buying boost, advancing 15.5 cents to finish the week at $2.774. Estimated volume of just 53,169 was evidence many traders elected to remain on the sidelines ahead of the weekend.

After free-falling on the heels of another bearish storage report announced last week, natural gas futures rebounded modestly Friday as traders covered shorts ahead of the weekend. The January contract finished at $2.701, up 14 cents for the session, but down a cool 50 cents from its high notched just two days prior. Estimated volume was high as 135,604 contracts changed hands.

In what might be its most bullish four-cent decline in recent memory, natural gas futures rebounded late in the session Wednesday as traders were able to look past a double helping of bearish storage news to bid up prices in the closing 20 minutes of trading. With its $2.813 closing price, the December contract was 3.9 cents lower for the session, but an impressive 7 cents above its low for the session.

With an 8.2 cent rebound on Friday to $3.218, August natural gas futures appeared to be taking their sweet time dropping below the $3 level, contrary to what many observers had expected. Although it will be extremely difficult for futures to shake the bearish trend with gas storage levels mounting at a record pace and cool weather across the Northeast, the trading activity on Friday looked suspiciously like a potential floor developing above the $3 mark, according to market analysts.

Alleviating oversold conditions created on the move lower over the past couple weeks, natural gas futures rebounded strongly Tuesday, as traders covered shorts amid undeniably bullish technical conditions. After gapping higher at the open, a steady flow of buying propelled the market to its highest level since May 1. At the closing bell, June was 25.9 cents higher at $4.653.