Trumps

Perhaps admitting to a little bit of overzealousness during Monday’s 16-cent rally, natural gas futures traders in overnight Access trading and then again on Tuesday pushed the February contract lower. With non-commercial traders continuing to hold a sizeable net-short position and some market watchers believing that the four-month-long downtrend is still intact, the question now becomes how much longer can the trend continue before it shows signs of cracking.

Buoyed by another spectacular session of crude oil trading, the September natural gas futures contract inched 5.1 cents higher Thursday to $5.712 as an early attack from the bears was thwarted by consistent, end-use buying support, according to brokers. The storage report, featuring an 83 Bcf injection, was seen as mostly a neutral event.

Dynegy Inc. blew away analysts’ forecasts last week when it announced its second quarter earnings, and it reversed a year-ago loss on the strength in its power generation and natural gas liquids (NGL) businesses. The Houston-based company, which had teetered toward bankruptcy two years ago, also improved its full-year outlook by settling four natural gas transportation contracts.

Dynegy Inc. blew away analysts’ forecasts on Wednesday, reversing a year-ago second quarter loss on the strength in its power generation and natural gas liquids (NGL) businesses. The Houston-based company, which had teetered toward bankruptcy two years ago, also improved its full-year outlook by settling four natural gas transportation contracts.

Buoyed by a new, 11-month high in the nearby crude oil market, the natural gas futures market shrugged off early weakness Monday to notch double-digit advances for the session. The April natural gas contract finished 13.4 cents stronger at $5.550, the highest prompt month closing price in nearly a month.

After initially moving higher on the news that a smaller-than-expected 34 Bcf was added to storage last week, the natural gas futures market tumbled lower Thursday on the realization that refills will continue for at least another week.

Despite forecasts Friday suggesting that a category one hurricane may be spinning in the Gulf of Mexico by Monday, natural gas futures shuffled lower ahead of the weekend in sympathy with the short-term trend and following bearish supply data released on Thursday. At $5.154, August was down 10.4 cents for the session and notched its lowest settlement price since April. At 59,899 contracts, estimated volume was weak, indicating that many traders were taking a wait-and-see approach to Tropical Storm Claudette.

After holding in the $5.20s for much of the session Friday, the February natural gas futures contract was flushed lower in the final 30 minutes of trading as short-term traders — fearing revised (warmer) forecasts Monday — liquidated their long holdings. The prompt month finished the week at $5.143, down 16.1 cents for the day and 20.1 cents for the week.

Phillips Petroleum Co., which holds down fifth place on the list of oil and gas companies worldwide, said its second quarter profits were up more than expected, jumping 37% on crude oil, natural gas and gasoline commodity pricing. Phillips, in the process of acquiring Tosco Corp., said income excluding special items was up to $601 million, or $2.33 a share, compared with $439 million, or $1.72 a share for the second quarter of 2000. However, revenues were lower, falling to $5 billion from $5.4 billion a year ago.