Perched at recent highs and just below contract resistance at$2.19, the May contract was poised to continue higher yesterday.And after opening at $2.17 local buying pushed prices to $2.189 inchoppy trading. But despite the bullish euphoria the market hadbefore the open, locals received little help from other marketsegments early yesterday and were forced to cover their longpositions Tuesday afternoon. The resultant sell-off left the promptmonth down 2.5 cents to $2.144.

A Gulf marketer was not surprised by the market’s decline,adding that it had been caught in a $2.08-18 trading range for awhile now. “The higher the market goes, fewer and fewer people arewilling to get on the long side it. Funds are long, but they arelong from $2.10-15. The question that still remains is who is goingto push the market higher?”

The Pegasus Econometric Group of New York, on the other hand,takes a more fundamental approach. The group points to weather andstorage factors, which they think will have to be sorted out beforethe market can move outside its recent trading range. “The[National Weather Service six- to 10-day] outlook remains mixed inour view, with below normal temperatures in the South offsettingcooling demand in the West. We’re expecting 30-40 bcf in the[American Gas Association storage] refills to be mildly supportiverelative to last year’s 54 bcf tally.” On balance they feel thatthe market may have missed its chance to continue higher, and abreak back under $2.14 would put the May contract on the defensive.

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