Strength

Following on the heels of price strength in the overnight Access trading session, natural gas futures extended to a new, one-week high Monday morning. However, as with the other rallies above the $5.30 mark in the last month, overhead selling entered the market and was enough to crush the advance. The February contract finished at $5.251, up 10.8 for the session, but well below its early morning Access high at $5.36.

While many energy companies have been cowering behind ugly third quarter financial results, Entergy Corp. on Wednesday stood out in the crowd with substantially higher earnings. In fact, operational earnings per share were up 21%, setting a new company record for third quarter.

A moderate amount of strength in the Rockies was the major exception Wednesday to a generally mixed bag of prices. Non-Rockies numbers were mostly flat but also ranged up to about a nickel higher or lower in some cases. Transco Zone 6-NYC took the only big fall of a little more than 50 cents.

Thursday’s market was a near-repeat of the one the day before: moderate softening in the East but closer to flat in the West. The main differences were smaller eastern losses (virtually all declines were around a dime or less Thursday) and the fact that a few western points, primarily PG&E-related, were able to eke out modest gains.

In a surprising show of strength considering the price-bearish fundamental picture, natural gas futures soared to new two-month highs again Monday as fund traders continued their accumulation of long positions. A gap higher open set the stage early yesterday and bears never fully regained control, watching helplessly as November traded to $3.30, its highest level since Aug. 22. The prompt month closed just off that level, up 16.1 cents for the session and 95 cents for the month at $3.202. Estimated volume was typical for an expiration day, with 100,102 contracts changing hands.

On the strength of its portfolio management energy strategy, Duke Energy’s third quarter results posted on Tuesday showed a 46% gain, with earnings per share (EPS) of $1.02, up from 70 cents per share a year ago. Revenues also rose 7% to $16.7 billion, primarily because of the Charlotte, NC-based company’s wholesale natural gas and power sales.

Adding to gains achieved Monday, natural gas futures extended to new three-day highs yesterday, as traders grappled with the first onslaught of chilly weather across the Midwest and Northeast U.S. The buying pressure was evenly distributed through the trading session, leaving the November contract with a 11.8-cent gain to finish at $2.388. The entirety of the winter strip lagged the prompt month only slightly, advancing 9.2 cents to finish at $2.778.

Stemming a two-week, $1.25 price slide, natural gas futures rebounded last week amid neutral to bullish fundamental factors and increasing constructive technical clues. After carving out a fresh 19-month prompt month low by trading down to $2.255 earlier in the week, the October contract finished strongly at $2.50 Friday, up 6 cents for the session and just beneath its $2.53 high for the week.

El Paso Corp. said last week the market has proved wrong all charges that it manipulated California gas prices over the last year while its marketing/merchant power subsidiary held control over 1.2 Bcf/d of firm capacity on its affiliate pipeline, El Paso Natural Gas. El Paso Merchant relinquished control over most of that capacity on June 1 yet gas prices in California continued to be abnormally high in relation to prices elsewhere in the country, El Paso said.