Regular

After gapping under $12 in the overnight Monday Access session to open Tuesday at $11.80, December natural gas spent the majority of the regular session trying to rebound. The prompt month got as high as $12.07 before collapsing again to close at $11.86, down 34.5 cents. Tuesday’s trade brings the week’s total losses to $1.195 after only two days of trading.

With the November contract’s expiration out of the way, December natural gas spent its first regular session as front month exploring support lines. After notching a low of $12.88, December went on to settle at $13.055, down 62.9 cents on the day and 11.2 cents lower than the contract’s previous Friday close. November natural gas expired Thursday at $13.832.

For a second consecutive regular session, natural gas futures were bent on testing lower levels in the morning only to be rebuffed in the afternoon. Uncertainty swirling around the potential damage to oil and natural gas infrastructure combined with a stagnant shut-in report helped October natural gas settle 21.6 cents higher Tuesday at $12.656, one day before the contract’s expiration.

FERC would be willing to consider requests filed at the Commission for cost recovery in the wake of Hurricane Katrina if such filings are jurisdictional to the federal agency, FERC Chairman Joseph Kelliher said last Tuesday.

As prompt-month natural gas futures prices continue to threaten their all-time record regular session high of $10.10, the only thing that remains fairly certain when looking at the entire natural gas complex is that prices will continue to be relatively high and volatile.

Despite beginning Tuesday’s regular trading session with another assault on the contract’s $9.91 high, September natural gas futures would get no closer than the $9.89 it posted at the market’s open.

The New York Mercantile Exchange Inc. said Monday that it will introduce a natural gas look-alike options contract during regular trading hours beginning on Aug. 15. The contract will be listed for 72 consecutive monthly contracts beginning with the September 2005 contract. The options will be European-exercise style and financially settled. The contracts will expire on the second to last business day prior to the underlying futures month. On expiration day, a call option pays out the difference between the settlement price of the underlying futures contract less the strike price multiplied by 10,000 MMBtu, or zero, whichever is greater. Likewise, a put option on expiration day pays out the difference between the strike price and the settlement price of the underlying futures contracts multiplied by 10,000 MMBtu, or zero, whichever is greater. Strike prices will be listed at $0.010 intervals and a minimum price increment of $0.0001/MMBtu.

Putting in their eighth up day out of the last nine sessions, September natural gas futures on Friday saved their best for the last 15 minutes of the regular session. During this time, the prompt month rallied to record a new $8.750 high before settling at $8.700, up 22.9 cents on the day.

Breaking out above last Wednesday’s $7.430 contract high, July natural gas futures — assisted by strength in crude and a hot weather forecast — reached a high in Wednesday’s regular session of $7.500 before settling at $7.441, up 21.3 cents on the day.