Triumvirate

Buoyed by weather forecasts, storage jitters, and strength in the cash market, natural gas futures erupted higher Wednesday as new buying competed with short covering in an expiration-day free-for-all. The February contract advanced 21.6 cents to go off the board at $5.66. However, the real story may have been the March contract, which gapped higher at the opening bell and did not look back as it advanced 27 cents to close $5.629. At 119,571 estimated volume was average for expiration day.

After holding support following a knee-jerk downward reaction to the latest industry supply data, natural gas futures vaulted higher in two distinct buying surges. The first rally consisted of a move back above $3.30 that came on the heels of the 10:30 a.m EDT storage report. After a brief siesta, bulls were running Thursday afternoon, lifting prices convincingly higher into the close. October finished at $3.342, up 14.9 cents for the day and 24.2 cents above its early-session low.

Pressured by a triumvirate of bearish factors — weather,technicals and cash prices — natural gas futures plodded lower inan abbreviated, pre-holiday session Friday as weak longs continuedto shed their positions. However, instead of liquidating theirlongs entirely, traders elected to roll their prompt holdings intoout months. At the closing bell, the February contract was 23.6cents lower at $8.472 while the summer strip (Apr.-Oct.) was 6.7cents higher on the day at $6.085.

Dynegy added a fourth regional marketing alliance and gainedentry into Georgia’s deregulated gas market by partnering with AGLResources and Piedmont Natural Gas. The three equal partners – whatDynegy CEO Chuck Watson calls a “dream team” – formed SouthStarEnergy Services LLC to offer unregulated energy products andservices to industrial, commercial and residential customers in theSoutheast. Offerings will include gas, electricity, fuel oil andpropane, along with related retail services. The Atlanta-basedcompany will have offices in Charlotte, NC, and Nashville, TN.