Tumbling

Except for still-tumbling prices in the Northeast and in theRockies, which ironically were among the chillier regionsWednesday, most of the cash market pulled out of the tailspin thathad characterized Tuesday’s start of November swing trading. Otherareas tended to range from mildly lower to mildly higher.

Despite tumbling prices in the nearby cash market, natural gasfutures held their ground Tuesday as buyers were comforted byextremely oversold conditions and supportive intermediate-termtechnicals. After trading within a wide, 20-cent swath yesterday,the December contract finished at $4.49, a narrow 0.5-cent increasefor the session.

After tumbling 5% on the release of a bearish storage reportWednesday, the natural gas market clawed its way back up yesterdayas locals were forced to cover shorts after watching stubbornsupport in the $3.90s hold yet again. With that buying pressure,the August contract finished 13.5 cents higher at $4.166, recoupingmore than half of Wednesday’s losses.

Despite moderating temperatures and tumbling electric prices,natural gas futures continued to climb yesterday, punching throughstubborn resistance amid new speculative length and renewedconcerns that storage inventories are too low. Easily outpacing itsprior life-of-contract high at $3.24, the June contract rallied13.4 cents higher to finish at $3.317. In doing so, futures reachedtheir highest mark by a spot contract since November 1997.

October futures managed to achieve a moderately strong recoveryFriday but apparently there was too much negative baggage left overfrom Thursday’s quarter-plus plunge to support cash. Physical gasprices continued their downhill slide, buffeted by the combinationof weak holiday weekend demand and mild weather virtuallyeverywhere. “Cash just didn’t stand a chance today,” a marketersaid.

After tumbling 8.1 cents lower in Tuesday’s sell-off, the marketseemed to take a breather yesterday with neither bulls nor bearsable to influence price movemnet in their favor. The June contractwas limited to a tight 4-cent trading range, slipping just 0.8cents to finish at $2.254. Estimated volume was moderate, with67,082 contracts changing hands.

The futures market was pressured lower Tuesday as sellers sentthe February contract tumbling back down to support clustered inthe $1.73-74 area. But once again the move failed to produce a newcontract low, which set off a short-covering rally that bid theprompt month higher just prior to the close. February settled at$1.817, a fraction of a penny off its high for the day and 2.1cents higher than last week’s closing price.