Stem

The return of industrial load from weekend hiatus did little to stem price losses Monday in most of the cash market. Moderating weather in much of the East and screen weakness extending into its third day Monday dragged a majority of points between a little less than a dime and a half dollar lower.

While an outright bearish natural gas storage report was needed to stem the recent meteoric rise in futures prices, traders received no such help Thursday morning as the Energy Information Administration (EIA) reported a slightly bullish 43 Bcf injection for the week ended Aug. 5.

Following a three-day, 13.5% decline off last Wednesday’s highs, natural gas futures checked quietly sideways Tuesday as locals picked each others’ pockets and bulls waited in anticipation of supportive storage news due out Thursday. As evidenced by the strong interest in the out months, strip buying was seen to lift prices at the closing bell. The December contract finished 2 cents higher at $3.883. The 12-month strip, meanwhile, advanced 3.6 cents to finish at $3.868.

Despite constructive gains in both the cash market and crude oilfutures market and following a string of gains in seven of the lasteight trading sessions, natural gas futures gave back a nickelyesterday as traders weighed in on the extremely technicaloverbought condition that existed in the market. And althoughTuesday’s modest retreat did little to satisfy those overboughtconditions, analysts question how much further the market will fallbefore buyers step back in.

For the most part yesterday cash prices carved out increases asTropical Storm Harvey lent some support to the East and maintenanceissues helped strengthen prices along the West Coast and Rockies.Yet mild weather nationwide, the expected American Gas Associationstorage report of higher-than-normal injections and a weak futuresscreen were traders’ main topics of conversation yesterday. And thegeneral consensus is that cash price increases may be hard to comeby for the next few days.

Will production declines expected to stem from the recent rashof producer spending cuts (see related story) lend support to gasprices this year? Well that’s just one of several questions on theminds of analysts as they speculate on what the market will grantproducers this year. While there’s not a consensus, the generalmood seems to be pessimistic.