Wondering

July natural gas futures showed some signs of weakness Tuesday, which had at least some traders wondering whether the 19.2-cent drop to $13.011 was something more than a small pullback in the larger bull move.

After TXU’s decision to cancel plans for eight pulverized coal-fired power plants in Texas, analysts are wondering how many other proposed coal-fired power plants will be shot down in the nationwide environmental battle against dirty coal.

After TXU’s decision to cancel plans for eight pulverized coal-fired power plants in Texas, analysts are wondering how many other proposed coal-fired power plants will be shot down in the nationwide environmental battle against dirty coal.

Given the massive gas storage surplus (50% above the five-year average), many market experts are wondering exactly how low gas prices will have to go in order for gas to begin replacing coal-fired generation this summer. That extra gas demand certainly will be needed. The question is whether it will be enough to slow storage injections so that producers won’t be forced to shut in their wells.

Some industry experts were wondering whether they were experiencing deja vu earlier this week as the energy futures complex once again spiked following a bullish research report produced by global investment bank Goldman Sachs. While there were those who believed the 34-page report by the market leader was largely responsible for the price spike on Tuesday, others weren’t so sure, with some noting that people are free to trade off of anything they want to.

The current level of volatility in the natural gas futures has some traders wondering if all that has happened is that one form of weather-induced volatility has been traded for another form or price hyperactivity.

Although it was eventually far outpaced by a soaring screen, the cash market did make some effort to keep up Monday. Nearly all points rose between 2-3 cents and about 15 cents, with gains on either side of a dime being most prevalent. Sources in several areas, however, reported lower numbers in late deals. A Northeast buyer said Transco Zone 6-NYC started in the mid $3.20s but was about a dime lower at the end.

Following a disappointing session Tuesday that had many bulls wondering if the party was over, natural gas futures spiked appreciably in the last 30 minutes of trading Tuesday to fill in a nagging two-month-old gap off the April daily chart. The American Gas Association’s announcement that 132 Bcf was withdrawn from storage last week spawned the usual Wednesday afternoon volatility as local and trade buying added to the short-covering seen earlier in the day from non-commercial speculative accounts. The April contract settled at $2.566, up 9.9 cents on the day.

The winter peak in gas demand has a new rival: summer peakdemand. And many market observers are wondering if the two canco-exist. With rapidly increasing gas-fired generation, theindustry will be hard pressed to meet traditional loads whileserving what once was considered a low priority customer – thepower generators.