Moderate warming trends in parts of the Midwest and Northeast, along with Friday’s 13.3-cent uptick by July futures and the return of industrial load from its typical weekend decline, propelled the cash market to gains at a large majority of points Monday.
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Morgan Stanley, which beefed up its energy trading portfolio last December with the purchase of El Paso Marketing LP (EPM), is moving one of its top investment bankers to Houston from New York to strengthen its global energy group headquartered there, the company said last week.
The cash market recorded strong advances Wednesday based on a combination of expanding cold weather and the previous day’s futures uptick of nearly 20 cents. Northeast citygates led the way as prices rose between about a nickel and nearly 80 cents. Northern Natural-Ventura was the only point failing to see a double-digit gain.
Getting a little boost from the $1.53 uptick in crude futures, August natural gas futures steadily climbed throughout Wednesday to settle 7.2 cents up at $5.977. The prompt month registered its second consecutive day higher following Monday’s 28.4-cent collapse, which brought August just below $6.
Prices were still moving higher in most cases Tuesday, but generally at a slower pace than on the day before. Markets as disparate as citygates in Florida and the Northeast, San Juan Basin and the Pacific Northwest/Western Canada were still seeing double-digit gains of up to about a quarter, with Algonquin citygates averaging a little more than $5. But a majority of points ranged from flat to up about a dime, with gains of a nickel or less prevalent.
As many traders had anticipated, Wednesday afternoon’s dime-plus uptick in natural gas futures translated into strong cash gains at most points Thursday. However, prices again deteriorated greatly in the capacity-constrained San Juan Basin, which was joined in its softness by Rockies pipes as supplies backed up there, largely unable to get to California and east-of-California markets via El Paso.
After pressing lower at the open, natural gas futures rebounded modestly Tuesday as traders played it safe amid a changeable fundamental and technical landscape. However, even the late buying surge was not enough to propel prices above Monday’s close, leaving the January contract with its second-straight losing session. The prompt month closed at $2.563, down 7.1 cents. Estimated volume of 110,574 was extremely high considering the relatively small price move and the absence of market-maker Enron. Historically, natural gas averages a volume of about 75,000 contracts, and 100,000-plus volume days are usually only seen during the last three days before a contract expires.
Natural gas futures continued lower Thursday as a gap-lower open and follow-through selling on the heels of Wednesday’s bearish storage report pressured futures prices briefly beneath the $4.20 level. At the closing bell, the prompt June contract was a nickel lower on the day at $4.248.
Despite turning downward again Friday, the screen’s uptick of nearly 15 cents the day before had a residual supportive effect for Friday’s cash prices in eastern and Permian/Waha markets. They ranged from flat at a couple of Northeast points to 15 cents or so higher (Gulf South was a rare softer point in Louisiana), with most gains between a nickel and a dime. Most western points declined by various amounts ranging from small to huge.
After thrice testing, but failing to break beneath support Thursday, natural gas futures rebounded at the New York Mercantile Exchange as traders put an end to a nine-day, 70-cent price slide. The June contract received the biggest buying boost, closing 4.4 cents higher at $4.527.