The price plunge that had seemed to be gearing up Wednesday cameto a quick halt Thursday as cash quotes were “up a ‘smidge,’ maybea penny or two,” according to a trader doing business in theMidcontinent and Southwest. Sources dragged out the old refrain of”following the screen,” although the tiny upticks in cash laggedfar behind the near-dime increase in the Henry Hub futures contractfor June. Essentially the screen strength arrested a developingbearish trend for cash.
Rebound
Articles from Rebound
Demand for Storage Gas Pushes Prices Higher
The rebound from Monday’s price downturn bounced high above therim Tuesday as many price points experienced gains well over anickel. The upticks were attributed to a rise in the futures marketlate Monday afternoon and early evening, and a growing inclinationto buy gas for storage now before prices rise further.
Futures Rebound Easily From Wednesday’s Dip
“It was like a bad dream,” was one marketer’s summation ofWednesday’s 4-cent decline that was quickly recouped by yesterday’s4.1-cent advance. Another trader was a little more specific,attributing the downward blip to funds rolling positions from Mayto June. But regardless of the rationale, Wednesday’s lowersettle-the first one in the last seven sessions-looked like theGrand Canyon nestled among the Alps.
Futures Snap Back in Late-Day Rebound
“You can’t win the game if you give the ball away” was aseemingly logical but somewhat superfluous observation made byHoward Cosell on Monday Night Football back in the 1980s. If Cosellwere to have commented on the natural gas futures market yesterday,he probably would have said something like, “The market couldn’tmove lower because there was no additional selling.” And althoughthat comment would also have been redundant, it aptly describes thenature of yesterday’s price action at the New York MercantileExchange, where once early selling dried up, the market was free tobubble higher in near-frictionless trade. The May contract finishedup 3.2 cents to $2.128.
April Continues to Climb, Gains $0.07 More
The strong corrective rebound of the April contract seemed indanger of coming to an end yesterday morning when the contract setnew lows for the week at $1.835, but April held and quickly resumedits upward path in afternoon trade to post a new high at $1.930 andclose the day at $1.928/MMBtu.
Futures Rebound Ahead of Storage Data
Light short-covering gently prodded the futures market higheryesterday as traders surveyed the prospect of a sizable storagewithdrawal reported in the American Gas Association’s storagereport this afternoon. The prompt February contract led all others,advancing 4.2 cents to settle at $1.821. With that small gain, themarket ended a five-day, 25-cent slide.
Futures Unchanged Ahead of Weekend
The futures market gave back some ground early in the dayFriday, but then managed to rebound late to trade to either side ofunchanged for the day. That enabled the December contract to settlefor the second day in a row at $2.553. Estimated volume was amoderate 47,537.
Afternoon Rebound Lifts Futures
Traders’ opinions have varied as to the direction the futuresmarket would take this week, and so it came as no surprise Mondaywhen it tested both the upside and the downside in early trading.But, when selling dried up below the $2.10 level, the Novembercontract was free to migrate higher to settle at $2.143.
Some Points Level Off, But Overall Outlook Still Weak
Most cash points tended to ignore Thursday’s rebound on thefutures screen and instead focused on weak fundamentals. Many GulfCoast and Midcontinent pipes were leveling off from Wednesday’sprecipitous plunges, although several in the Gulf fell a few morecents. The losers included points in South and East Texas despite aferocious heat wave straining the state’s electric utilities.
Futures Rebound to Show Gain for the Week
The futures market moved quietly higher in fairly subduedtrading on Friday until a round of position squaring and freshbuying boosted the market before the close. That was enough topropel the September contract above its recent trading range tosettle at $1.877, a 6-cent advance on the day.