Strongly

The June natural gas futures contract was able to shrug off its second straight negative open Wednesday as buyers entered the fray when it became apparent the market wasn’t going to fill in a key chart gap from late April. The June contract finished at $5.660, up 9.2 cents for the session and 20 cents above its morning low. Gains were even larger in the July contract, which rumbled 10.2 cents higher to $5.735.

Transco said Tuesday it will “strongly consider issuing an Imbalance Operational Flow Order” due to below normal temperatures throughout much of its market area. “Market pricing and continued cold weather make it likely that current negative transportation imbalances will not be reduced. Transco cannot continue to manage these imbalances given current storage inventory levels and reduced operating flexibility. Absent immediate, voluntary resolution of shippers’ negative imbalances,” the OFO is a possibility, Transco said. The pipeline also noted that it will not accept any delivery make-up nominations for the rest of February 2003 and that pooling point tolerances had been tightened to 1% for negative imbalances.

After tumbling lower during the first hour of trading, natural gas futures rebounded late Friday morning as traders covered shorts in an effort to minimize their exposure should a bullish development — either geopolitical or weather related — emerge over the long holiday weekend. In an abbreviated session cut short at 1 p.m. EST ahead of the Monday holiday, the March contract closed at $5.851, up 11.1 cents on the day, but down 19.2 cents for the week. Futures will reopen Monday at 7 p.m in Access trading with regular open-outcry trading set to resume at 10 a.m. Tuesday.

Buoyed by a flow date that several sources expect to be the coldest yet in the East this winter, an approaching return of severe weather in the South, and a strong screen rebound, cash prices recorded across-the-board increases Wednesday.

After posting a negative open, natural gas futures rebounded strongly Tuesday to notch its fourth-straight higher close, as both speculative and commercial traders loaded up on long positions in anticipation of the formation of Tropical Storm Isidore in the Caribbean. As it turns out, that buying was enough to press prices to a new four-month high at $3.695. Slipping only slightly to close at $3.679, the October contract finished 24.9 cents above its earlier low and 17.2 cents above Monday’s settle. Estimated at 113,063, volume in the gas pit was extremely heavy.

After holding support following a knee-jerk downward reaction to the latest industry supply data, natural gas futures vaulted higher in two distinct buying surges. The first rally consisted of a move back above $3.30 that came on the heels of the 10:30 a.m EDT storage report. After a brief siesta, bulls were running Thursday afternoon, lifting prices convincingly higher into the close. October finished at $3.342, up 14.9 cents for the day and 24.2 cents above its early-session low.

The Florida Public Service Commission (PSC) on Friday strongly encouraged investor-owned electric utilities and generators to hash out their differences over possible changes to the state’s generation bid rules and reach a compromise that would be presented to the PSC for further consideration in early September. If such a compromise is not reached, the PSC is expected to move forward with suggestions from PSC staff to begin a formal rulemaking process on changes to the bid rules.

The January aftermarket started out strongly relative to end-of-December numbers, but without straying too far from apparent first-of-month index levels. Nearly all of the swing movement ranged from flat to about 20 cents higher, but gains tended to get much bigger at Northeast citygates, topped off by an advance of more than a dollar at the Transco Zone 6-NYC pool.

Natural gas bulls saved their best for last Friday, as they buoyed prices to a new two-week highs amid a combination of profit-taking and short-covering. After moving steadily higher throughout the session, the January contract spiked at the close to finish the week at $2.846, up an even 9 cents on the day and 27.8 cents above where the contract was the Friday before.