Traders Say $2.30 No Problem for May Futures
For the second trading session in a row yesterday the May
contract dipped lower at the open, but was unable to completely
fill in the chart created between last Wednesday's $2.18 high and
Thursday's $2.20 low. And once that early selling pressure dried
up, the market was free to rally on waves of buying by both local
and commercial traders. The May contract pressed higher throughout
the session, spiking above the $2.30 level at the closing bell
before settling at $2.299, a 7.3-cents advance on the day. A
technical difficulty at Nymex last night suspended the after-hours
computer-only Access trading session.
Cash prices, which continue to be well bid, were viewed as a
supporting factor in Monday's futures strength sources said. NGI's
Henry Hub price for today is $2.23. "Futures imitated cash today,"
said Ed Kennedy of New York-based Pioneer Futures. "Futures were
weak at the outset [Monday], but as cash prices ratcheted higher
throughout the morning, so did the futures," he said, adding that a
large commercial trader, short in both markets was seen as an
Although he felt it was still too early to make a prediction
about the direction of the market heading into the May settlement
Wednesday, a Gulf marketer admitted the supply-demand picture was
tainted in the bulls' favor. "Funds are long, Houston is short,
basis is tight. All indicators point to higher prices," he
Kennedy agreed that May is a difficult call. "If cash stays
strong then May [futures] will have a difficult time moving below
$2.26. "But watch out for June," he warns. "Once May is off the
board, June could come crashing back down to earth." June finished
at $2.325 Monday, up 7.2 cents for the day.
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