Tumble

It had appeared Thursday the tumble back down for cash pricesmight get just as steep as the climb upward had been earlier lastweek. But in Friday’s trading for the weekend, the downward slopegot considerably gentler as few points other than the Southwestbasins fell more than a nickel, and many declines were milder thanthat. In fact, Northern Natural’s demarc and Ventura points sawsmall upticks due to freezing temperatures in parts of the pipe’smarket area, and Chicago citygates also rose, probably fromforecasts of the Upper Plains chill moving eastward.

After watching prices tumble 10 cents in a tumultuous last hourof trading Thursday, bulls were quick to assume control of themarket Friday as they continued to add to their already hefty longpositions. The September contract finished at $2.698, up 5.1 centsfor the day and 15.5 for the week.

Without any impetus to break in either direction, natural gasfutures continued to subsist on a steady diet of range-boundtrading yesterday at the New York Mercantile Exchange. But incontrast to Tuesday’s session, which featured the market closingnear its high trade for the day, Wednesday’s session was dominatedby selling that ushered the prompt August contract down 3 cents to$2.146. Estimated volume was light, with only 44,985 contractschanging hands.

Access trading kept traders on their toes late last week. Aftera more than 7-cent rally in last Wednesday’s computer-only tradingsession, the June contract doubled back Thursday evening, slippingmore than 5 cents lower before Friday’s open. And the selling wouldnot stop there as bears continued their push toward lower pricesthroughout the trading session Friday. June finished down 8.6 centsfor the day at $2.253.

After two brief rally efforts failed to produce higher prices,the futures market again came under selling pressure as moreprominent bearish fundamentals more than offset below-normal marketarea temperatures. And in a rare occurrence, the 4.1-cent loss seenin the prompt March contract was outpaced by more substantiallosses in the April, May, June and July contracts.

It has been argued the emergence of storage facilities in thenatural gas industry has robbed cash prices of some of theirvolatility during summers and winters and replaced it duringshoulder months. Perhaps a similar affect has happened this pastyear because of mother nature. The El Ni¤o winter, which helpedkeep volatility in check this weekend, may very well be behind theextremely high volatility seen at the New York Mercantile Exchangethis past week.