Strength

Virtually all eastern points, along with the Permian Basin/Waha market, yielded to weak weather fundamentals and expectations of another large advance in storage injections by dropping about a dime or slightly more Tuesday. However, a spreading West Coast heat wave kept Rockies/San Juan/Pacific Northwest numbers and those related to the Northern California market strongly on the rise.

Realizing that bulls had spent all their bullets, bears hadtheir way at Nymex for the second-straight session Wednesday asthey took prices lower in several selling waves. Not even amid-morning rally could dissuade traders from continuing to takeprofits following the market’s precipitous spike to $9.65 earlierin the week. As a result, the January contract was left to slumplower for much of the afternoon, finishing 60.8 cents lower at$7.537.

The Powder River Basin, which is known widely for its coal-bedmethane (CBM) gas production, is without a doubt the “most active”onshore basin in the Lower 48, and will likely hold thisdistinction for a long time to come, according to a majorgatherer-processor in the basin.

Buoyed by the screen’s late-Wednesday run-up and continuedfirmness in the expiring August futures contract Thursday, cashnumbers made strong gains yesterday that generally ranged betweenabout 15 cents and a little more than 20 cents. The advances tendedto be smaller in western markets, however.

Fueled by strength in the overnight Access trading session,natural gas prices moved higher Friday morning as traders coveredshort positions acquired during the market’s 30-cent move lowerlast week. However, after peaking at $3.93 in the first hour oftrading, the bears went back to work and were ultimately successfulpushing the market lower on the day. The August contract finishedthe session down 2.6 cents at $3.834 in a session that saw anextremely-light, 48,413 contracts change hands.

Buoyed by strength in summer 2001 pricing, the natural gasfutures market rumbled higher yesterday afternoon, retracing lossesincurred earlier in the session. The August contract finished 2.9cents stronger at $4.257 after notching a $4.14 low earlier in theday. Estimated volume was light, with only 50,870 contractschanging hands.

The early May aftermarket is shaping up as typical of itspredecessors in the new millennium: showing remarkable strengthdespite a general lack of fundamental support. Only in the West,where a combination of hot weather and nuclear outages sent powerprices spiking, did sources see anything besides a sharp rise onthe futures screen to account for Monday’s cash upticks.

In what may turn out to be a Pyrrhic victory, bulls weresuccessful on two fronts Friday — testing resistance at $3.00 andposting a gain for the third straight session. However, thoseachievements may have come at a price because even dyed in the woolbulls were shaking their heads after watching heavy selling enterthe market once prices reached over the $3.00 mark.

As traders had expected, prices used Thursday afternoon’s andFriday morning’s futures strength as a springboard to achieveincreases that were mostly between a nickel and a dime Friday.