Slide

“It’s like prices are wandering aimlessly in the wilderness,”one trader remarked of Tuesday’s sharp reversal from the marketstrength that opened the week. All points were on the same downhillpage as declines ranged from about 15 cents to 90 cents but withmost of them clustered in the range of 30-50 cents.

End-of-December swing prices rebounded Friday from the week’searlier slide, rising by a dollar or more in many cases but alsofeaturing a few scattered declines. The January aftermarket beganabove first-of-month indexes by varying degrees except atCalifornia/Pacific Northwest points.

Buoyed by renewed storm fears and bargain buying followingThursday’s 6% price slide, natural gas futures were higher Friday,leaving traders to speculate as to whether the downward pricecorrection is complete. November received the largest boost of anymonth, recovering 6.2 cents to close at $5.186. The winter strip,followed suit, gaining a nickel to close at $5.105.

This week’s price slide almost, but not quite, came to a haltWednesday. Some points were flat and a few managed small upticks,but those were outweighed by small declines that only rarelysurpassed a nickel.

What goes up, must come down,” was one trader’s description ofyesterday’s late sell-off in the natural gas pit at Nymex. However,a more appropriate expression might have been “what can’t keepgoing up, must come down,” because after pressing through stubbornresistance at $3.20 Monday morning, the June contract hadlanguished on either side of $3.20 for two days, unable to attractmuch in the way of follow-through buying. That range-bound tradingcame to an abrupt end Wednesday when fresh storage data wasreleased. The June contact finished down 9.1 cents at $3.126.

The cash market arrested the slide that had been developingTuesday by coming to a near-standstill in price movement Wednesday.Only a few points ranged any further than a penny or so to eitherside of flat.

Gas futures observers concluded Tuesday’s 6.7-cent slide was afalse breakout to the downside because May was unable to breakthrough support yesterday at $2.82 and rebounded a healthy 6.6cents on the day to $2.888. The high for the day was $2.900, whilethe low was $2.820. The three-month summer strip rose 5.7 cents to$2.918.

Ending a two-day slide, natural gas futures snapped back to lifeFriday as traders were drawn back to the long side of the market bysupportive technicals and stronger weekend cash prices. In just itssecond day as the prompt contract, May advanced 7.2 cents to finishat $2.945, just a penny off its high for the day and just 6 centsof its all-time high notched last Tuesday.

Nearly all points continued to slide a few more cents Thursday,but afternoon rallies by three key April futures contracts (naturalgas, crude oil and heating oil) had many traders believing thatwould spark a rebound in the gas market today.