After rallying more than 15 cent from last weeks lows, naturalgas futures took a breather Wednesday, trading sideways within atight 4.5-cent range. The June contract settled unchanged for theday at $2.359.

The lack of upward momentum by the futures market gave nearbycash prices an opportunity to play catch-up yesterday, severaltraders noted. NGI’s Henry Hub average for today of $2.36 is nearlya spot match with the June close and just a penny more thanfirst-of-month index. A Gulf Coast trader feels that because cashprices have moved up to match the futures, the ball once againrests in the futures traders’ court. “Ultimately it will all comedown to what the funds decide to do. Weather is benign, and untilthat changes the market will continue to look to Nymex fordirection,” he said.

Even though it will likely be weeks before the market can latchonto weather reports for price direction, the market was notcompletely without news yesterday. Released too late to affecttrading Wednesday, the American Gas Association reported 34 Bcf ofgas was injected into storage last week. That build, while fallingin line with industry expectations focused on a 20-40 Bcf refill,paled in comparison with the 78 Bcf tally of a year ago. Total gasin underground storage facilities now stands at 1,408 Bcf, which is131 Bcf more than the same time last year.

Tim Evans of New York-based Pegasus Econometric Group said froma purely economic perspective the storage report is undeniablybullish. However, he admits it depends how much of the lowinjection figure was already factored into prices. Looking ahead,Evans thinks the market could initially trend lower in an apparentrepeat of last week’s meltdown. However, he feels that “head fake”lower will only lead to fresh buying interest, which ultimatelywill propel the market past the $2.40 level by early next week.

Last night, the first part of his prognostication looked to beright because the June contract was already 2.7 cents lower in theafter-hours Access trading session.

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