Uptrend

The uptrend in North America’s unconventional natural gas and oil supplies and global demand dynamics suggests that the outlook for pipeline and storage infrastructure development may not only be bullish but also long-term, according to analysts with Raymond James & Associates Inc.

The continued uptrend in North America’s unconventional natural gas and oil supplies and global demand dynamics suggest that the outlook for pipeline and storage infrastructure development may not only be bullish but also long-term, according to analysts with Raymond James & Associates Inc.

To borrow from Mark Twain, rumors of the futures uptrend’s demise have been greatly exaggerated. One day ahead of expiration, November futures reversed course from Monday’s decline on speculation that Thursday morning might see a significantly lower injection than anticipated. The prompt month posted a 51.2-cent jump to settle at $8.402.

To borrow from Mark Twain, rumors of the futures uptrend’s demise have been greatly exaggerated. One day ahead of expiration, November futures reversed course from Monday’s decline on speculation that Thursday morning might see a significantly lower injection than anticipated. The prompt month posted a 51.2-cent jump to settle at $8.402.

The natural gas futures market is back in an uptrend, and despite mostly bearish fundamental factors, is not having a difficult time finding reasons to move higher. On Friday it was hype over a new hurricane forecast, which helped cap last week’s choppy trading action with an impressive, 18.5-cent advance. On Monday, it was technical short-covering, with bulls charging toward at key upside target at $6.52.

For the first time since a marathon success streak began with the advent of the “continental market” in the mid-1980s, Canadian natural gas exporters have weathered a setback in the United States. On the heels of posting the 14th consecutive record year for the trade in 2001, new data showed Canadian sales, prices and revenues all took dives, as export deliveries ran afoul of a warm winter, a slowing economy, fuel-switching and surplus supplies in storage.

After spending the first two weeks of July in a mini uptrend, natural gas futures broke beneath major support last week, as traders continued to factor in the blistering pace of storage refills and normal- to below-normal temperatures. The August contract was hit with heavy selling Monday, and then again Wednesday through Thursday, pressuring prices to new 14-month lows and dashing bulls’ hopes that a bottom had been achieved. August moved mostly sideways on Friday to close at $2.955, up a modest 1.6-cent for the day but down a whopping 29.5 for the week.

Although still very much intact, the uptrend which has carriedprices higher for much of the year suffered a defeat yesterday, astraders liquidated positions on the open to create a potentiallybearish technical scenario. The January contract took the sell-offsquarely on the chin, tumbling $1.00 lower to evoke a lock-limitdown trading halt at about 10:15 a.m. (ET) Tuesday. Afterre-opening 15 minutes later with new two-dollar limits in eitherdirection, the market continued lower to finish at $8.145, down$1.268 for the session.

This week’s uptrend in cash prices continued Wednesday butclearly showed signs of losing momentum. Several points in variousmarkets leveled off with flat showings, and the gains were small,generally less than 4 cents. PG&E citygates saw the day’s mostnotable decline of more than a nickel due to a high-inventory OFOby the utility that is effective today and carries a stringent 3%tolerance for positive imbalances.