Session

In its first regular session action as prompt-month contract, March natural gas futures — propelled by cold in the Midwest, inflation concerns and rumors of a record storage withdrawal — ran up to a high of $8.130 before finishing Wednesday at $8.045, up 10.2 cents from Tuesday’s close.

While the Northeast continued to bask in spring-like 60- to 70-degree temperatures in January for a second consecutive session, natural gas futures traders inexplicably continued to pressure upside resistance at $8. The February contract touched that level briefly before finishing out Tuesday at $7.967, up 8.8 cents from Monday’s finish.

Despite a bearish 87 Bcf storage withdrawal reported on Friday, February natural gas futures surged higher during the second half of the regular session to close at $7.841, up 16.7 cents from Thursday’s close and 45.5 cents higher than the previous week’s finish.

January natural gas futures settled lower for a sixth consecutive regular session on Tuesday as isolated near-term cold would appear to be no match for warmer-than-normal winter temperature forecasts, more than comfortable natural gas storage levels and significant weakness in neighboring crude futures. January natural gas reached a low of $7.080 before closing Tuesday at $7.155, down 5.9 cents from Monday.

October natural gas futures staged a late-session rally Wednesday and finished at the high end of the day’s trading range. October rose 17.6 cents to settle at $5.805, and the November contract added 11.4 cents to finish at $6.690.

September natural gas futures spiraled lower for a third consecutive session Wednesday, creating new lows on its way to a close of $5.578, down 23.9 cents from Tuesday’s close. Since Hurricane Dean set firm sights on a more westerly Gulf of Mexico-sparing course over the weekend, the prompt-month contract has shed an astounding $1.432.

Hurricane Dean’s westerly Gulf of Mexico-sparing course continued to beat the natural gas futures market lower for a second consecutive session as traders appeared ready to resume the downtrend that was interrupted two weeks ago by storm hype. The September contract put in a $5.770 low Tuesday before closing at $5.817, down 22.3 cents on the day.

After September natural gas futures ventured north of $7 for the third consecutive session on the news that Gulf of Mexico oil and gas producers could be faced with a hurricane Thursday and another next week, the bulls were once again unable to sustain their gains as the contract dropped in the afternoon to close at $6.864, down 7.6 cents on the day.

Coming off of a fairly strong natural gas futures session on Monday and faced with widespread heat across the United States, the cash market posted healthy gains Tuesday that ranged from about a dime to over 50 cents. However, cash market gains might be a short-term phenomenon.