For the second Monday in a row the futures market kicked off theweek with a lower open, which featured bears as the earlyaggressors. That, however, is where the similarities between thetwo weeks ended. Whereas prices continued down the slippery slopelast Monday, yesterday’s trend was almost a straight line higher.Sources said a number of factors-technical short-covering,supportive weather forecasts and even a boost from the nearby crudeoil trading pit-were reasons for the 7-cent gain to $1.769 in Aprilfutures yesterday.

“All eyes were on crude today,” commented a trader whodownplayed the rally in natural gas. “Even though there is not thatbig of a [price] correlation, natural [gas] has gotten some goodsympathy buying spilling over from the crude pit.”

Tim Evans of New York-based Pegasus Econometric Group agreedthat natural gas received some “psychological support” from crudeoil, but thinks it is almost comical how the oil market is reactingto the OPEC news. “First the market rallied on the generalannouncement of the 2 million barrel production cut. Then themarket surged higher again last week as some of the specifics werereleased, even though that information called for no additionalcuts.”

In addition to the support from the energy complex, Evansbelieves natural gas has received some bullish news of its ownthis past week. Technically, this market is starting to look nice.Open interest reached an all-time high Thursday afternoon during aprice downswing, which usually means speculative selling was thecause. That could cushion the downside and even spur a quickrebound as those shorts move for the exit, Evans reasoned.

But technical factors were not alone in yesterday’s priceaction. Fundamentally, the market also received support from boththe six- to 10-day forecast released Monday and the 30-day outlookissued last Thursday. Both call for considerable areas of belownormal temperatures, Evans said.

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