Technically

Feeding off gains notched in the overnight Access trading session, the natural gas futures market was able to string together another positive trading session Tuesday as early short-covering led to new highs for the week. Steady selling was seen throughout the afternoon, but it was not enough to pressure the market below unchanged on the day and the October contract finished with a 1.7-cent advance at $4.511. At 77,470, estimated volume was strong considering the narrow 11-cent trading range.

Natural gas traders do have a perverse sense of humor after all. Less than 24 hours after the Department of Energy revised downward its forecast for the average annual wellhead price this year to below $5.00, the futures market rocketed back above the $5.00 mark Thursday amid technical bullishness and following a slightly smaller-than-expected storage report (74 Bcf injection).

In a topsy-turvy trading session conspicuous only for its lack of bullish leadership, natural gas futures slipped lower Wednesday amid two waves of long liquidation. An early afternoon rally was about all the buyers could muster, and it was overshadowed by selling at the market’s open and again heading into its close. March finished at $5.785, down 19.2 cents for the session.

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.

Amid muddled fundamentals and a rapidly improving technical situation, natural gas futures reversed direction Wednesday as local traders used Tuesday’s retracement as a springboard to new eight-week highs. A 10.8-cent gain in the September contract was trumped by an 11.3-cent rise in the October contract. The two months, which constitute the end of the seven-month summer strip and storage injection season, finished at $3.274 and $3.339 respectively. The only non-bullish factor Wednesday was estimated volume, which at 95,733 was a little on the low side.

Despite a second straight day record electricity demand, and spiking New York City physical gas prices, natural gas futures traded quietly sideways Tuesday, as neither bull nor bear was willing to influence a move in either direction. On its first day as prompt contract, September slipped 1.4 cents to finish at $2.891, just 0.1 cents above its opening trade for the session and smack-dab in the middle of its $2.85-93 trading range. At 86,242, estimated volume was moderate to light.

Acting on the mentality that Tropical Storm Barry was innocent until proven guilty (see Daily GPI, Aug. 3), natural gas futures tumbled lower Friday morning as traders re-initiated shorts that they had covered just 24 hours prior. As of noon (EDT), the September contract was 19.7 cents lower at $2.995. The market then proceeded sideways for most of the afternoon as sellers took a breather to monitor the storm. They were not finished however, and after gaining confidence the storm was not going to re-intensify Friday, sellers conspired for one last push lower. At the closing bell, the September contract was 22.1 cents lower at $2.971.

After a briefly checking below support at $4.00 and then back up into the low $4.10s, natural gas futures limped lazily sideways for much of the session Thursday as trade buying met almost equally with fund and local selling. At the closing bell the July contract was 7.4 cents lower for the session at $4.038. Estimated volume was relatively light, with only 67,994 contracts changing hands.

Following a lackluster rally attempt last Thursday, bears in the natural gas pit reasserted themselves Friday, pressuring the spot month lower for the tenth time in the last eleven trading session. Buoyed by overnight short-covering, the June contract was fast out of the chute at the opening bell, as it broke above Thursday’s $4.55 high. However, the buying pressure dried up at about 10:00 A.M. (EST) leaving the market susceptible to a sell-off. At the closing bell, June was 3.7 cents lower at $4.490.