Retreat

As a producer had predicted, Monday’s rebound in the cash market was fleeting. Although some parts of the Midwest were about to see temperatures retreat again after a brief warm-up, the moderate nature of the general weather outlook combined with prior-day futures weakness to take nearly all of the cash market lower Tuesday.

The long retreat by Canadian natural gas exports may be ending. For the first time in about 18 months, pipeline deliveries to the United States increased in September, according to the latest report on the international trade by the National Energy Board (NEB).

The long retreat by Canadian natural gas exports may be ending. For the first time in about 18 months, pipeline deliveries to the United States increased in September, according to the latest report on the international trade by the National Energy Board (NEB).

October natural gas futures continued to retreat in active trading Monday. The October contract opened sharply lower at $2.935 in electronic Globex trading and traders said $3 would be a formidable trading barrier to further advances. Spread trading was active and trend followers say the market has to make a sizeable advance before they would entertain switching from a bearish to neutral outlook. At the close October futures fell 5.6 cents to $2.977 and November gave up 5.5 cents to $3.998.

While December natural gas futures on Wednesday failed to match Tuesday’s nearly 40-cent gain, the contract also failed to mount any kind of retreat, leaving market bulls in control for the time being. December natural gas gained 3 cents on the day to finish at $7.249, while December crude gave back $5.23 of Tuesday’s gains to close at $65.30/bbl.

Faced with declines in both heating and cooling load and having negative guidance from the previous day’s 12.6-cent retreat by May gas futures, cash prices fell at a large majority of points Wednesday.

Proving that resistance up at $7.500 is still very much intact, November natural gas futures on Friday put in a significant retreat. After breaching but failing to settle above $7.500 during the three previous regular trading sessions, the prompt-month contract Friday put in a $7.035 low before finishing the week at $7.041, down 33.3 cents from Thursday but 6.7 cents higher than the previous week’s close.

With a modest Northeast heat wave due to retreat, moderate to cool temperatures prevailing in most other areas and no tropical storm threat to offshore production in sight, prices fell at a large majority of points Wednesday. Flat to a little more than a dime higher quotes, concentrated in the Rockies and Pacific Northwest, brought a return of mixed price movement to the cash market.

Monday’s 28.6-cent retreat by August futures proved to have less negative impact on Tuesday’s cash market than one might have expected. Most points were able to find enough cooling load and/or storage purchasers to range from flat to a little more than a quarter higher Tuesday. The Northeast tended to see most of the biggest gains of about a dime or more; a large majority of the upticks were in single digits.