Futures Manage Minor Gains in Choppy Trade
Adding to gains achieved in the Monday evening Access trading
session, the May contract continued higher yesterday morning as
bulls confidently bolstered their long positions. However, recent
gains notched by natural gas have not come without a fight and
Tuesday was no different. After topping out at $2.17, the prompt
month reversed direction in the afternoon, nearly erasing its
advance by the close. May finished at $2.136, up 0.8 cents on the
Sources agreed stronger cash market prices and constructive
weather forecasts gave the market the reassurance it needed to tack
on early gains yesterday. The National Weather Service six- to
10-day forecast released Monday corroborated last Friday's
prediction by calling for below normal temperatures into the
weekend for much of the upper Midwest, Ohio Valley, Mid Atlantic
and Northeast. Henry Hub cash prices were up 8 cents Tuesday to
Colder than normal temperatures, sources note, could also slow
the rate of storage injections in weeks to come, thereby further
constricting the year-on-year storage surplus. The American Gas
Association (AGA) estimates that surplus to be 278 Bcf.
But in the meantime the market will have to get past this
afternoon's release of fresh storage data and the Pegasus
Econometric Group of New York is looking for the AGA to show
another small injection similar to last week's 2 Bcf refill. The
group adds that only an injection of more than last year's 22 Bcf
figure would send a bearish message as it would serve to increase
the year-on-year surplus for the first time in almost a month.
In daily technicals Pegasus sees support for May at $2.08-09.
Resistance resides at the top of the chart gap to $2.19, with $2.30
and $2.45 looming as bullish goals over the intermediate term.
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