Surges

Amid three distinct selling surges, natural gas futures returned to pre-hurricane (Isidore and Lili) levels Thursday as traders grappled with a one-two combination of bearish news. The first blow came before the open when traders learned that Hurricane Lili had weakened prior to landfall. Still reeling from that, traders were again stymied upon learning that a greater-than-expected 47 Bcf was injected into storage last week, according to the Energy Information Administration. Then after holding support at $3.78 for much of the afternoon, the November contract broke lower in the final 30 minutes of trading. It closed at $3.724, down 43.6 cents for the session and more than 50 cents beneath its $4.25 peak notched during the height of the hurricane hype Tuesday.

Buoyed by two distinct buying surges, natural gas futures shuffled higher Tuesday as commercial futures traders reacted to rising temperatures across most areas of the country and strong demand in the nearby physical market. While losses Monday were spread out almost equally across the entire natural gas strip, Tuesday’s gains were front-loaded with the August contract receiving a 12.9-cent boost to $3.282. By comparison, the 12-month strip advanced just 9.6 cents to close at $3.715.

A small decline at the MichCon and Consumers Power, and a largerone at the Southern California border were the only exceptions tothe raging bull market that continued to prevail in cash tradingThursday. Otherwise, average price increases ranged from about 50cents in parts of Louisiana to more than $4 at the Chicagocitygate.