Smaller

Outside of Rockies numbers plummeting by 40 cents or more, and a smaller San Juan-Blanco loss of a little more than 20 cents, the cash market held up more strongly Friday than some traders had expected. Non-Rockies/San Juan quotes ranged from flat to up nearly a dime, with gains of less than a nickel most common.

Moody’s Investors Service on Thursday downgraded the debt of AES Corp., citing concerns about smaller future dividends from subsidiaries, weaker power prices and “deteriorating conditions” in international markets were the company holds substantial generation interests. The downgrade affects about $20 billion of debt securities, and Moody’s warned that AES will remain on review for another possible downgrade.

The revelations last week that Aquila Inc. will soon shutter its merchant services unit and that Dynegy Inc. stopped its online trading business were not nearly as surprising as one industry veteran had expected. Referring to this time as “the Great Shakeout,” energy consultant Ben Schlesinger said a year from now, “those who don’t want to be in this business won’t be in it, and those who are good and really want to be in this business, will be.”

Buoyed by a much smaller-than-expected storage injection figure, natural gas futures spiked dramatically higher in the last 30 minutes of trading Wednesday as traders covered shorts initiated during the long and slow decline over the past nine and a half months. The November contract experienced a blitzkrieg of buying just after 2 p.m. EDT and prices reacted instantaneously, rocketing 32 cents in just in just two minutes and notching a fresh two-month high at $3.00. November finished just off that level at $2.981, up a cool 30 cents for the session.

Buoyed by the release of a second-straight smaller-than-expected storage injection figure, natural gas futures climbed back from negative territory yesterday afternoon to notch a new three-week high, as weak shorts scrambled to cover their positions. The November contract finished at $2.48, up 9.2 cents for the session, but off slightly from the $2.54 high notched about 10 minutes earlier.

Propelled by a smaller-than-expected storage injection figure and fueled by concerns over a tropical depression in the eastern Caribbean Sea, natural gas futures jumped to a new two-week high Thursday as holders of recently established short positions headed for the exits. That short-covering was enough to boost the November contract to a $2.47 high en route to its $2.414 close, a 9.4-cent advance for the session.

Prices continued to sink Friday, but by significantly smaller amounts than the day before. Declines mostly ranged between a nickel and 15 cents, but were larger in California largely due to milder weather in the state. A majority of the price drops were in the vicinity of a dime.

Bullied by a smaller-than-expected storage injection figure, natural gas futures shot 20 cents higher in 40 minutes Wednesday as traders alleviated oversold conditions and pressed the market through several important technical levels. The August contract received the biggest boost, closing 30.6 cents higher at $3.276.

Prices continued to fall Thursday but generally by smalleramounts than earlier this week. Price movement mostly ranged fromflat to down about a dime. California continued to be the oddmarket out with substantial upticks in Northern California and aSouthern California border decline of about a quarter, exceedingall other softness.