Slumping

After slumping the last two days, natural gas cash market averages across the country staged a meager rebound on Thursday for Friday delivery despite the fact that futures prices continued to decline.

The slumping economy and healthy levels of natural gas in storage continued to put downward pressure on the commodity’s price on Thursday as the February contract put in a new low for the downtrend before closing out the regular session at $4.681, down 9.9 cents from Wednesday’s close.

Swelling concerns surrounding the U.S. and global economy turmoil led to slumping stock and energy markets Monday. The Dow Jones Industrial Average — which was down as much as 800 points earlier in the day — finished Monday down 369 points, while November crude futures shaved $6.07 to close at $87.81/bbl and November natural gas futures broke below support just above $7 to close at $6.835, down 52.3 cents.

February natural gas futures shot lower Tuesday as some market watchers hypothesized that the slumping U.S. economy upstaged colder-than-expected temps in near-term weather forecasts. The contract recorded a low of $8.080 before closing out Tuesday’s session at $8.196, down 15.7 cents from Monday’s finish.

November natural gas futures made it three consecutive trading days higher Tuesday despite slumping lower in overnight trading Monday. The prompt month started the day trading at its $5.460 low for the session but rebounded in the afternoon to settle at $5.759, up 11.6 cents on the day.

With more questions than answers surrounding Greenwich, CT-based Amaranth Advisors LLC’s significant losses due to a slumping natural gas market, Connecticut Attorney General Richard Blumenthal reiterated Tuesday his long-standing call for more oversight of hedge funds in general.

With the number of players and volumes of energy deals slumping badly, large national industrial and commercial customers have fewer creditworthy parties to help hedge their portfolios, but for some of the energy service sector players this spells opportunity. San Diego-based Sempra Energy’s energy services firm pulled about half of it revenues and even more of its margin from hedging and related commodity services for large end-users this year, according to the company. For traditional traders, it is a different story.

Except for a major turnaround of previously slumping Rockies prices, Wednesday’s cash market was close to a repeat of Tuesday: flat to a few cents higher at nearly all non-Rockies points. The Midcontinent saw most of the larger non-Rockies increases around 4-8 cents because of snowy conditions returning to its Midwest market area.

Whether it be a slumping Sunday, a manic Monday or a terribleTuesday, early-week trading has taken a toll on bulls in thenatural gas futures pit at Nymex recently, with losses stacking upboth in overnight Access trading sessions and in regular openoutcry sessions. For the fourth week in a row, the market was hitwith a deluge of late weekend selling, giving rise to a significantdown-move on the first trading day of the week. And while it wasdelayed by a day because of the Nymex holiday, Monday night’sselling was just as potent as the selling seen on the prior threeSunday nights, leaving some market-watchers to suggest traders haveearmarked overnight Access sessions — especially those over theweekends — as easy opportunities to push prices in their favor.