Traders returned to a fairly quiet market Monday in which prices increased by about a dime or less at most eastern points but by considerably larger amounts in the West. California was heating up rapidly and registered triple-digit recoveries from weekend softness.
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As Expected, Storage Data Weighs on Futures Market
Natural gas futures traders might as well sleep in on Wednesday mornings. Or maybe they already are…. Wednesdays have taken on a sort of split personality, in which a barren desert suddenly gives way to a deluge of trading activity when fresh storage data is released at 2 p.m (EDT). That was the case yesterday as futures opened unchanged only to drift lazily sideways for 4.5 hours. Then, when a larger-than-expected storage figure was released, the market tumbled 13 cents in just five minutes. July rebounded modestly in the final 65 minutes of trading to close at $3.801, down 9.1 cents on the day, but up 7.1 cents from its low for the session.
Weekend Softness Milder Than Generally Anticipated
Weekend prices were soft as expected, but probably fell less than many traders were anticipating. Except for sizeable losses of 20-30 cents or more in the Rockies/San Juan and at PG&E-related points, nearly all of Friday’s declines were 15 cents or less, and a majority of those were around a nickel.
Market Seen as Unlikely to Pull Out of Slide Soon
The general market continued its downslide Wednesday, and traders saw very little chance of a near-term rebound, citing further screen softness, a storage injection report that significantly exceeded all prior expectations, and expectations that the out-of-season blasts of winter hitting much of the U.S. this week are about to go away.
Bit of Winter in Spring Causes Most Non-CA Points to Rally
Cash prices rebounded virtually everywhere Monday except in California as traders returned from the long Good Friday/Easter weekend. Most gains were between about a dime and 15 cents, with the Rockies seeing mostly smaller ones that ranged from flat to up about a nickel, and points in the Northeast and Appalachia registering larger advances of about 20 cents or more.
All See Demand as Weak, But Most Prices Rise Anyway
While gas traders, especially those who deal with western points, pondered the ramifications of the PG&E bankruptcy filing (see related story), most of the cash market saw moderate firmness Friday. A large majority of the upticks were in the vicinity of a dime, although scattered points rose as much as about 15 cents and others were up only about a nickel. There were small declines in the Rockies and substantially larger ones in California.
With Little Fundamental Change, Strong Rally Surprising
Substantial rebounds in cash prices Tuesday surprised many traders, especially because there were no significant changes in overall market fundamentals, and screen support remained minuscule. Triple-digit California gains led a cash market advance that saw most points gaining at least a dime or more, with “or more” being the key operative words. Increases tended to be smallest in the Northeast (Algonquin citygates were flat) and largest in the Rockies/San Juan market.
Technical Rally Leaves Bulls, Bears Searching for Answers
With little in the way of fresh fundamental news, natural gastraders were forced to base their decisions on a combination oftechnical factors and their own personal instinct Thursday, as theylifted prices steadily higher throughout the trading session. TheApril contract closed 17.1 cents higher at $5.212, just off its$5.22 high on the day.
Technical Blip, Weather Forecast Trigger Spike
The third time was a charm yesterday for bulls in the gas pit atNymex as locals and technical traders covered shorts en masse afterdiscovering a technical blip on their charts. After thrice testingand failing to develop beneath the $5.74 level Wednesday eveningand yesterday morning, the market rocketed Thursday afternoon, ledby a March contract that rumbled 67.3 cents higher to close at$6.38.
Prices Rally on Fresh Forecasts, Except in California
Traders cited new forecasts of colder weather, both near-termand intermediate-term, as the chief instigator of yet anotherreversal in cash market direction Thursday. Nearly all pointsrecorded strong gains between about a quarter and 60 cents.California was the conspicuous exception with further largedeclines, but it remained the most expensive market by far.