Tumbled

Near-month natural gas futures rallied all the way up to $7.180 Wednesday morning, but then lost footing and tumbled to a low of $6.750 by 1:30 p.m. EDT before ending the day down 13.3 cents at $6.875. Despite strong cash prices due to power generation load, the likelihood that Tropical Storm Debby won’t pose a threat to the U.S. appeared to take the wind out of the futures market’s sails during the regular trading session.

As the gas futures market continued to fall Monday, approaching the $6/MMBtu area, eastern cash markets tumbled another 25-45 cents on below-normal temperatures and plenty of rain. Perhaps the best bearish indication available was the 40-cent price drop in the New England market despite the complete shut-down of the Sable Offshore Energy Project’s 400 MMcf/d of gas production.

Near-month gas futures tumbled 21.4 cents on St. Patrick’s Day in weak trading to end the week at $7.053, up about 33 cents from where the week started but with a clear indication that the recent rally has lost significant steam.

Shrugging off lingering technical bullishness, the natural gas futures market tumbled lower Thursday as traders adjusted their positions in reaction to slightly bearish supply news. Light trading volume at Nymex due to traders’ observance of Yom Kippur was seen as adding to the price volatility, with the November contract carving out a wide, 41-cent trading range. It closed for the session at $13.103, down 42.1 cents for the day.

Royal Dutch/Shell Group’s share price tumbled Friday after announcing it would recategorize nearly 20% of its proved hydrocarbon reserves — about 3.9 billion boe. More than 90% of the total comes from a reduction in proved undeveloped reserves; the remainder in proved developed. The changes would trim proved reserves to 15.6 billion boe from the 19.5 billion boe.

Following the old “buy the rumor, sell the event” trading mantra, natural gas futures tumbled lower Monday as sellers punished the market just as the coldest weather of the season was arriving in the eastern United States.

While July gas futures tumbled sharply Monday morning with a low at $6.15, prognosticators at investment banking firm Raymond James & Associates are betting the gas storage situation isn’t nearly as rosy as it seems, and tight supply will end up pushing gas prices back above $8/MMBtu in the next few months.

Western Gas Resources shares tumbled 7% last Thursday and another 5% on Friday to $28.38 after the company reported a 33% decline in quarterly net income to $14 million ($0.19/share) compared to $20.9 million ($0.28/share in 2Q2003) because of one-time special charges for redemption of 10% senior subordinated notes ($6.7 million) and the cost ($7 million) of settling false price reporting charges with the Commodity Futures Trading Commission.

Natural gas futures tumbled lower in moderate trading Friday on the New York Mercantile Exchange. Weak overnight trading set the stage for a sharply lower open and when the opening bell sounded, prices had already registered an 11-cent loss.