Storms

Boosted by the bullish combination of hurricane fears and Gulf-area production curtailments, the natural gas futures market surged higher early Tuesday on waves of commercial and local-trader buying. After gapping higher at the opening bell, the September contract shot to a new one-week high at $5.96 as all eyes were watching the development of Tropical Storm (TS) Bonnie in the Gulf of Mexico.

Winter storms and an OFO caused big price jumps Monday in the West, while freezing low temperatures in the Upper Plains and Midwest helped generate sizeable gains there and in the Midcontinent supply area. Elsewhere in the market numbers were mixed but mostly lower as the near-term forecasts remained relatively moderate for the end of December.

It was a given that weekend prices would rise; the question was by how much. The answer: generally about 40 to 60 cents across the country, with no area left out. The Northeast led the overall advance with upticks reaching nearly a dollar.

As expected, the natural gas futures market experienced another high-volatility trading session Friday as traders kept an eye on Hurricane Isabel. Prices dove lower during the first hour of trading only to rebound convincingly in the afternoon as traders were reticent to be short heading into the weekend. October finished at $4.766, up 2.8 cents for the day, and down only a scant half-cent for the week.

Natural gas futures continued to chop sideways Tuesday as traders appeared hesitant to bet too heavily one way or the other while a major hurricane spins in the Eastern Atlantic and fresh storage data is scheduled for release Thursday. The futures market rebounded modestly as weak shorts covered their Monday afternoon sales. The October contract closed at $4.73, recouping 6.9 cents of the 11 cents it lost in trading on Monday.

Natural gas futures fell sharply in abbreviated pre-holiday trading Friday as technical selling apparently outweighed concerns over the development of several tropical systems. The October contract finished its second session as prompt month on a negative tone, dropping 21.3 cents to close at $4.731.

The winter of 2002/03 doesn’t seem to realize its time is up. Snow and ice storms scattered from the central Plains through the Midwest and Northeast resulted in gains ranging from about a nickel to 45 cents in non-Rockies/San Juan Basin markets Monday, although a couple of scattered points barely eked out any increase at all.

Lower gas and oil production in North America offset gains made overseas by Unocal in the third quarter. The company reported that earnings (excluding special items) from continuing operations fell slightly during the third quarter to $126 million, or 52 cents/diluted share, compared with the Thompson/First Call consensus of 54 cents/share and 3Q2001 earnings of $127 million, or 52 cents/share.

Net quarterly losses were reported by ConocoPhillips, in its first financial report since completing its merger, and Amerada Hess last Thursday, putting downward pressure on major oil shares. Hess shares fell more than 11% to $58.54 by mid afternoon, while ConocoPhillips shares were down only about 2% to $47.20 because the charges were expected and its results from continuing operations were in line with Wall Street forecasts.