Sympathy

After opening lower in sympathy with weaker cash prices, the natural gas futures market worked its way back to unchanged Monday as traders groped for fair value amid contrasting weather outlooks.

In sympathy with higher crude prices, and as another winter storm approached the Northeast, natural gas futures turned modestly higher in light pre-holiday trading Tuesday. Book squaring was the main feature in the abbreviated session. January closed 3 cents higher at $5.146.

After opening lower in sympathy with lower cash market prices, natural gas futures rebounded Wednesday in reaction to wide price swings in the nearby crude oil pit. Although they finished well beneath their highs for the session, both natural gas and crude oil futures managed gains on the day. January natural gas finished at $5.278, up 3.8 cents for the session and January crude closed at $30.44, up 34 cents.

In sympathy with firmer crude oil prices and in reaction to constructive weather forecasts, prompt month natural gas futures rebounded off early lows Monday to post a fifth-straight daily advance. The January contract gained 5.7 cents to $5.341 and the February contract notched a 6.2-cent rise to $5.297.

After extending to new 18-month highs on forecasts calling for cool weather through the rest of the month, natural gas futures reversed lower yesterday amid weakness in the nearby crude oil pit. For the gas market, the selling came in two distinct surges — one in the late morning hours and the other near the 2:30 p.m. EDT closing bell. The November contract finished at $4.157, down 8.2 cents for the session and a whopping 26.3 cents off its new high.

Buoyed by renewed tropical storm concerns and in sympathy with higher crude oil prices, natural gas futures rebounded modestly Wednesday as traders covered shorts and added to their length ahead of the release of fresh storage data Thursday. However, the day’s gains were cast in doubt by a late sell-off following the market’s failure remain above Friday’s $3.25 low. At $3.193 the October contract was nearly a dime off its $3.29 high, but still up 6.1 for the session. Crude gained 48 cents to close at $28.27. Estimated volume in the gas pit was heavy with an estimated 90,435 contracts changing hands.

In sympathy with lower crude oil prices and in reaction to the virtual certainty that neither Tropical Storm Dolly nor Edouard will pose a threat to production, natural gas futures continued their week-long descent Tuesday as locals and commercial traders liquidated long positions. With a gap-lower open on the daily chart, bears set the tone right from the outset. However, by 11 a.m. EDT, the selling pressure had dried up, leaving the market to chop sideways throughout the rest of the session. October finished at $3.132, up 3.2 cents from its morning low, but down 16.4 cents for the day.

Buoyed by the one-two combination of hot weather forecasts and higher cash market prices, particularly in the Northeast, natural gas futures prices moved higher Wednesday on fresh commercial buying mixed with light speculative short covering. After trudging methodically to a $3.04 high at 1 p.m. EDT, the September contract fell in the last 90 minutes of the session as traders positioned themselves ahead of this mornings release of the weekly gas storage report. The prompt month closed at $2.954, up 6.3 cents for the day, but 8.6 cents off its daily high.

In sympathy with a late rally experienced by the rest of the energy complex, natural gas futures surged higher into the close Monday, as speculative fund and local traders covered shorts and propelled the market to its fourth-straight gain. After gapping lower at the opening bell, the momentum quickly turned in bulls’ favor as buyers stepped up and pressured the March contract through key technical levels at $2.16 and $2.21. Sellers backed away once the market had pierced $2.21, leaving buyers little choice but to bid up the market higher. The March contract finished at $2.286, up 9.5 cents or 4.3% for the session.