Futures Fizzle Ahead of Storage Data
For the second day in a row, the natural gas futures market was
caught in tug of war as traders weighed their options-either buy
into the recent rally or sell, expecting a return to the
long-standing downtrend. The indecision could be seen in
yesterday's price action where prices trended higher in the morning
only to turn sharply lower in the afternoon. The May contract
finished 4 cents lower at $2.096.
A Houston marketer said the schizophrenic futures activity also
could be seen in cash market dealings, which experienced large
bid-ask spreads for much of the morning. But in contrast to the
futures market, he felt sellers were the winners in cash trading as
prices climbed throughout the morning.
Another source said the market was in a holding pattern
yesterday ahead of the release of the weekly storage data. "There
was a good deal of uncertainty surrounding the size of the
injection. Expectations ranged from almost nothing to as much as a
45 Bcf refill."
And although the 30 Bcf injection released by the American Gas
Association last night was nestled within the range of
expectations, bulls wasted little time last night in claiming it as
a victory. The May contract rumbled higher in after-hours trading,
posting a 3.4-cent gain to $2.13 by 6 p.m. EST.
Gas in underground storage facilities now totals 1,367 Bcf, 286
more than the same time last year.
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