Speaking

Volatility continued at the Nymex Tuesday as natural gas futures prices plodded higher in sympathy with surging prices in the nearby crude oil pit. After an initial push to the downside failed to crack the $4.70 level, local traders were active buyers and had little trouble goosing the prompt month into a healthy, late-day rally.

Feeding off gains notched in the overnight Access trading session, the natural gas futures market was able to string together another positive trading session Tuesday as early short-covering led to new highs for the week. Steady selling was seen throughout the afternoon, but it was not enough to pressure the market below unchanged on the day and the October contract finished with a 1.7-cent advance at $4.511. At 77,470, estimated volume was strong considering the narrow 11-cent trading range.

Natural gas traders do have a perverse sense of humor after all. Less than 24 hours after the Department of Energy revised downward its forecast for the average annual wellhead price this year to below $5.00, the futures market rocketed back above the $5.00 mark Thursday amid technical bullishness and following a slightly smaller-than-expected storage report (74 Bcf injection).

In a topsy-turvy trading session conspicuous only for its lack of bullish leadership, natural gas futures slipped lower Wednesday amid two waves of long liquidation. An early afternoon rally was about all the buyers could muster, and it was overshadowed by selling at the market’s open and again heading into its close. March finished at $5.785, down 19.2 cents for the session.

Amid muddled fundamentals and a rapidly improving technical situation, natural gas futures reversed direction Wednesday as local traders used Tuesday’s retracement as a springboard to new eight-week highs. A 10.8-cent gain in the September contract was trumped by an 11.3-cent rise in the October contract. The two months, which constitute the end of the seven-month summer strip and storage injection season, finished at $3.274 and $3.339 respectively. The only non-bullish factor Wednesday was estimated volume, which at 95,733 was a little on the low side.

Despite a second straight day record electricity demand, and spiking New York City physical gas prices, natural gas futures traded quietly sideways Tuesday, as neither bull nor bear was willing to influence a move in either direction. On its first day as prompt contract, September slipped 1.4 cents to finish at $2.891, just 0.1 cents above its opening trade for the session and smack-dab in the middle of its $2.85-93 trading range. At 86,242, estimated volume was moderate to light.

Speaking on his company’s pending mega-merger with Phillips Petroleum, Conoco CEO Archie Dunham told a Houston civic association that size does not matter much in a corporate merger; it’s how well the companies fit together that is important.

Speaking at an analyst conference last week in Houston, Exxon Mobil Corp. Chairman Lee R. Raymond remained pessimistic about the development of a natural gas pipeline through Alaska. Backing the results of a preliminary study by Exxon Mobil, Phillips Petroleum Co. and BP Plc, the three largest lease holders along the North Slope, he said the future of an Alaskan pipeline still remains a long shot, due to the nature of natural gas volatility along with the overall cost of the enormous project.

Speaking at an analyst conference Tuesday in Houston, Exxon Mobil Corp. Chairman Lee R. Raymond remained pessimistic about the development of a natural gas pipeline through Alaska. Backing the results of a preliminary study by Exxon Mobil, Phillips Petroleum Co. and BP Plc, the three largest lease holders along the North Slope, he said the future of an Alaskan pipeline still remains a long shot, due to the nature of natural gas volatility along with the overall cost of the enormous project.