After spiking as much as 7 cents higher in the Wednesday eveningAccess session, the new prompt month was the focus of muchconjecture and speculation. Would June continue higher, followingthe example set by May, or fall from its already lofty perch? Formany, it is still too early to tell, but if yesterday’s priceaction was any indication, June will have a difficult time matchingMay’s 50-cent price increase over the past month. After opening at$2.40, the June contract tumbled throughout the session to close at$2.339, a 0.2-cent decline from Wednesday’s close.

While May’s tenure as prompt month was marked by a bullishcombination of both fundamental and technical factors, June hasonly been affected by the fundamentals factors of storage and cashprices. Cash prices for both April and May continued higherThursday, with Henry Hub quotes pushing into the mid- toupper-$2.30s. Meanwhile, a smaller than expected storage reportreleased last night added to the bullish sentiment.

However, Tom Saal of Miami-based Pioneer Futures remainsunconvinced that higher prices are in the future. “Massiveshort-covering, mostly by commercial traders, was responsible forour rally to $2.40. That is effectively limiting the number ofbuyers available if the market continues downward. He looks forprices to trend back into the $2.20s until the market can latchonto something more substantial.

Isn’t the low storage injection substantial? Not yet, arguesSaal. “An injection season is not decided by one week’s storagefigure.” He continued, noting that below-normal temperatures instorage sensitive regions of the country last week probablycurtailed storage injections. “Now we know what will happen whenthere is some demand in the market, I want to see what will happenwhen there is no demand in the market.”

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