Trading

The surge that has characterized cash trading activity this weekcontinued Wednesday but at a significantly slower pace, suggestingto some that prices had reached or were nearing peaks. The newupticks left most eastern points in the vicinity of October indexlevels, while markets in the West padded their already considerablestandings above indexes.

For the first time in several trading days, there was nodivergence between Eastern and Western market directions Wednesday.It was up, up and away all around as nearly all points registeredgains of around a dime or higher.

The November contract debuted as the prompt month yesterday byposting modest gains during a quiet trading session that saw nofresh news. November opened lower and quickly tested Monday’s $2.27low, but light commercial buying helped drive the market up 4.5cents to settle at 2.347 for the day. Estimated volume was a modest33,428.

The market wasted little time retracing Thursday’s losses inactive trading on Friday by gapping higher on the open beforeexploding upward amid growing concerns of more supply disruptionsdue to storms in the Gulf and Atlantic. The October contract spikedas high as $2.35 on a wave of panicked buying early in theafternoon on Friday as traders were already facing supplyinterruptions associated with Tropical Depression 8. However, byearly afternoon traders were shifting their concern to the lessimminent, but potentially more severe Georges still located in theAtlantic. That allowed traders to take profits ahead of the weekendand October to slip lower. October finished up 12.2 cents to $2.26.

The futures market spiked higher in trading Thursday, adding togains posted Wednesday evening as traders pointed to a host ofbullish factors. A “startling storage report,” continuedshort-covering, and a increasing supportive technical picture wereall cited as reasons for the advance. That prompted both theOctober and November contract to 12.5-cent gains, settling at$1.958 and $2.207 respectively.

Natural Gas futures tumbled late in the trading session Tuesday,breaking momentarily below major support at $1.945, before settlingat $1.951. The nearly 15-cent slide exhibited by the Augustcontract comes on the heels of a nearly 3-week decline, leavingmany traders wondering if Tuesday’s big move lower was the end ofthe downtrend or one just picking up speed. Estimated volume of106,004 contracts favored the later.

Cash was king for most of the month of June; oftentimes tradingat a premium to the Nymex futures contract. But that seems like adistant memory as cash prices shrugged off some of the season’shottest temperatures to slip, for the second day in a row, by up to5 cents almost across the board. While some traders expressedsurprise at the weakness, others said this is a sign the Nymexscreen is regaining control of market direction.

Duke Energy Trading and Marketing, L.L.C. (DETM) continued itsstrategy of allying with local direct marketing and energycompanies as a way of tackling the retail market by entering intoan energy management and marketing agreement with United GasManagement of Pittsburgh. DETM plans to support United inaggregating residential natural gas customers in selected areas ofthe country.

Koch Industries and the Royal Bank of Canada have formed astrategic alliance to jointly market energy-related trading andderivatives products to clients in North America andinternationally. The alliance is designed to provide the RoyalBank, which is one of the world’s top foreign exchange banks, with $30 billion/day in transactions, direct access to energy industryinformation and a broader array of energy derivative products, suchas weather derivatives. The deal gives Koch a connection to aworldwide collection of investment clientele. Royal Bank and itssubsidiaries serve 10 million clients through more than 1,500branches and offices located in 36 countries.