(Story updated with Monday's natural gas price drivers, update on cotton prices and analyst commentary on the bond market and yuan bonds)
NEW YORK ( TheStreet) -- Natural gas futures for April delivery blew past cotton to lead in commodities price action Monday amid a bout of short-covering by traders.
Natural gas futures for April delivery rose 11.6 cents, or 3.1%, to settle at $3.925 per million British thermal units on the New York Mercantile Exchange.
"I think it's more technical in a short-covering rally, so to speak," said Phil Flynn, a senior market analyst with PFG Best, in explaining the natural gas rally. "I think when oil pulled back from a high a bit, you saw some short-covering a little bit on that trade."
Flynn said that last week, as oil prices kept soaring, traders were long on oil and heavily short on natural gas. The trading of such spreads has been increasing along with higher oil prices, according to Flynn.Natural gas plays largely finished higher Monday even as the broader equities fell on a semiconductor sector downgrade by Wells Fargo, Moody's' downgrade of Greece and rising oil prices, which weighed on investor sentiment. PAA Natural Gas Storage, L.P. (PNG) rose 0.1% to $23.94 and Niska Gas Storage Partners (NKA - Get Report) ticked up 0.3% to $20.65. Atlas Pipeline Partners (APL - Get Report) added 4.8% to $30.31. Kinder Morgan (KMI - Get Report) rose 0.2% to $30.90 and Kinder Morgan Energy Partners LP (KMP) ticked up 0.2% to $73.41. EnCana (ECA - Get Report) fell 0.6% to $32.12, while Chesapeake Energy (CHK - Get Report) lost 0.4% to $33.45.
In the morning, cotton was the biggest price gainer, popping by its exchange limit of seven cents as demand roars, but supplies tighten -- possibly with the help of farmers withholding supplies. Cotton futures for May delivery rose 1.4 cents, or 0.7%, to settle at $2.1414 a pound Monday.