Short

June natural gas futures gained ground as traders covered short positions prior to both the June contract expiration and the release of government inventory figures. At the closing bell June natural gas had risen 3.4 cents to $4.379 and July had gained 3.2 cents to $4.423. July crude oil jumped $1.73 to $101.32/bbl.

Natural gas is mostly methane, which is a much more potent greenhouse gas, especially in the short term, with 105 times more warming impact pound for pound than CO2, said Cornell ecologist Robert Howarth. He added that “even small leaks make a big difference” and estimated that as much as 8% of the methane in shale gas leaks into the air during the lifetime of a hydraulically fractured shale gas well, which is up to twice what escapes from conventional gas production.

Unconventional natural gas and liquids plays account for a larger slice of the gas-directed rig count pie than they did just a short time ago. More horizontal drilling and the emergence of the second generation of shale plays characterize the market today, according to analysts at Barclays Capital.

April natural gas futures managed an end-of-week rise Friday although short-term traders cited no change in market fundamentals and hinted that they were simply playing well defined trading ranges. Longer-term bulls point to a storage deficit, and bears contend that a decline in horizontal drilling will be necessary for the market to post a bottom.

Unconventional natural gas and liquids plays account for a larger slice of the gas-directed rig count pie than they did just a short time ago. More horizontal drilling and the emergence of the second generation of shale plays characterize the market today, according to analysts at Barclays Capital.

Triple-digit plunges in the Northeast and at some locations in the Midcontinent and West led a price downturn across the board Friday. Moderating temperatures in the short-term forecast for several areas, along with some easing of supply shortfalls in the Southwest and the usual weekend decline of industrial load, contributed to arresting the market’s general blizzard-based strength of the preceding four days.

March natural gas futures inched higher in uninspired trading Friday on the New York Mercantile Exchange. Short-term traders see the market still vulnerable to continued price erosion, but those with a longer-term perspective see now-average supply levels keeping any further market deterioration in check.

Futures were mixed in light pre-inventory report trading Wednesday. Short-term traders noted little in the way of directional trading and cited forecasts of warmer eastern weather expected to take some of the edge off any weather-driven advances. At the close February futures fell one-tenth of a penny to $4.287 and March added 1.1 cents to $4.298. February crude oil fell 37 cents to $91.12/bbl.

A short-term continuing resolution (CR), which both houses of Congress were expected to vote out Tuesday, will provide additional funding to states for low-income energy customers.