Natural Gas Futures Soar to New Highs on Fund Buying and Summer Driving Season
Natural gas futures experienced a sharp increase on Monday, May 24, 2004, reaching new highs as fund buying and concerns ahead of the Memorial Day weekend fueled the market. The New York Mercantile Exchange (Nymex) reported that the first 10 months of the natural gas market set new contract highs, with the June gas futures contract trading at $6.60/MMBtu, up 24.2 cents or 3.8%.
Key Takeaways:
- Fund buying in crude and gas markets contributed to the volatility in the natural gas market, with the June gas futures contract reaching an intraday high of $6.64/MMBtu.
- Traders pointed to the U.S. summer driving season and the Memorial Day weekend as key drivers of the market's bullishness, with the power market in the Northeast and summer heat in Texas also cited as factors.
- The Nymex reported that the first 10 months of the natural gas market set new contract highs, following the crude market higher.
- George Speicher of Dow Inc in Houston stated that crude is up a dollar despite OPEC's efforts, with the funds not willing to let the market dip.
- Charlie Sanchez of Gelber & Associates in Houston attributed the market's rise to heavy fund-buying and the usual crude market concerns ahead of the Memorial Day weekend.
Statistics:
- The Nymex June gas futures contract traded at $6.60/MMBtu, up 24.2 cents or 3.8%.
- July gas futures rose 24.6 cents to $6.655/MMBtu.
- Nymex July crude futures were up 99 cents to $40.88/barrel.
- At the benchmark Henry Hub, May gas is trading $6.65/MMBtu, right above the June contract.
- Rest-of-month is running at $6.56/MMBtu.
- Northeast pipelines traded to $7.20/MMBtu, well above weekend ranges.
Sources:
- Dow Jones Newswires, "Natural Gas Prices Rise Sharply Monday"
- John Edmiston, Dow Jones Newswires, 713-547-9209; john.edmiston@dowjones.com
- COMTEX (http://www.comtexnews.com)