Relatively

Buoyed by heavy market-on-close buying, natural gas futures spiked higher at the closing bell, but that only served to trim losses suffered earlier in the trading session. The December contract finished at $2.606, down 9 cents for the session. Meanwhile, the January contract closed with a 1.6-cent gain at $2.951, proving that traders have not yet given up on the winter. Estimated volume of 120,569 was heavy, even considering it was December’s penultimate trading day.

A relatively bullish storage report (65 Bcf), rising futures prices, continued moderate heating demand and the shutdown of another unit at the Palo Verde nuclear station in Arizona all contributed to solid price increases across the board yesterday.

Florida Gas Transmission issued an Overage Alert Day notice for its market area Friday with a relatively stringent 5% tolerance for negative daily imbalances. The pipeline said its “capacity is being fully utilized, warmer weather is being experienced in the market area, and FGT’s overall linepack is lower.”

Eastern markets held up relatively strongly for the weekend considering the lower-demand flow period and a continuation of weak weather fundamentals. Most points in the East ranged from flat to just a few pennies down Friday, and a few scattered ones achieved small gains. The West stayed with its earlier trend of mostly larger declines, led by an OFO-related plunge for border-SoCalGas.

Due to a relatively warm February and “price-induced reductionsin gas demand,” the winter natural gas crisis is not as bad as itcould it be, according to Energy Security Analysis Inc. (ESAI) inits March Natural Gas Stockwatch. With prices back in the $5 areathe question now becomes, where do we go from here?

Amid mild weather forecasts and on the heels of another in astring of relatively small storage withdrawals, natural gas futuresprices tumbled lower yesterday as traders continued to liquidatelong positions. The selling was seen in two distinct surges —first on the open as traders increased their activity as pricesdipped to new 3-month lows and then again shortly after the releaseof fresh storage news, when the prompt March contract free-fell 15cents lower from 2:00 to 2:05 p.m. (EST). The March contract closedat $5.146, down 13.2 cents for the session.

Hurricane guru William Gray of Colorado State University is predicting a relatively quiet tropical weather season in the Atlantic and Caribbean next year mainly because of a weak to moderate El Nino. Gray expects nine named storms. Five storms would become hurricanes and two of those would be major hurricanes.

Hurricane guru William Gray of Colorado State University ispredicting a relatively quiet tropical weather season in theAtlantic and Caribbean next year mainly because of a weak tomoderate El Nino. Gray expects nine named storms. Five storms wouldbecome hurricanes and two of those would be major hurricanes.

The cash market was relatively quiet Monday, and for quite a fewtraders, dismayed by last week’s hypervolatility, that suited themjust fine. Points in the East tended to range from flat to about anickel or so higher, while the West was considerably stronger withadvances of about a dime or more in most cases.