Traders

Building off the December contract’s 12.7-cent gain during its first day in the limelight Thursday, traders pushed the front-month contract through the $4 psychological barrier on Friday to close at $4.038, tacking on another 14.8 cents in the process.

Cash traders appeared to have no concern about Tropical Storm Richard possibly surviving an overland passage and emerging into the southern Gulf of Mexico this week. What mattered more to them was a persistent lack of substantive weather-based demand (either heating or cooling); storage inventories poised to hit another all-time high level; and the previous day’s screen plunge. The physical market recorded large double-digit declines across the board Friday.

November natural gas futures traders pushed the contract lower Thursday morning following news from the Energy Information Administration (EIA) that a slightly larger than expected 74 Bcf was injected into underground stores for the week ending Sept. 24.

With a parade of storms coming off the coast of Africa at a frenetic pace, one theory is that natural gas futures traders — much like they did the previous Friday — took to covering their short positions ahead of the weekend to limit their risk (see Daily GPI, Sept. 7). However, another leading idea is that futures have hit a seasonal bottom and are ready to explore higher prices.

Natural gas futures traders continued to probe $4 support on Tuesday as the September contract recorded a low of $4.027 before closing at $4.039, down 2.7 cents from Monday’s finish.

Hot weather from the mid 80s to around 110 was expected to dominate the next-day forecast, but that failed to sway cash traders, who paid more attention to continuing futures weakness in sending prices lower at virtually all points Tuesday.

Coming off Monday’s 22.2-cent decline in September natural gas futures, traders on Tuesday tested the upside a second consecutive day with similar results. After reaching a high of $4.825, the front-month contract backed off once again, closing the regular session at $4.639, down 6.2 cents from Monday’s finish.

The August aftermarket began slightly softer at most points as traders regarded generally moderate mid-summer temperatures in the Northeast and Midwest and the usual weekend drop of industrial load as more important than the previous day’s 10.9-cent climb by September futures in their prompt-month debut.

August natural gas futures gained ground Tuesday on the day prior to expiration. Traders see little in the way to suggest that any fundamentals have changed, and perceived the day’s activity as movement within a broad and uninspired trading range. At the close August natural gas rose 6.3 cents to $4.675 and September added 6.3 cents as well to $4.646. September crude oil tumbled $1.48 to $77.50/bbl.