Futures Shrug Off Storage Report Again
For the second straight Thursday, natural gas traders ignored a
seemingly bullish American Gas Association storage report by
pressuring the market lower in light, long liquidation. The June
contract was the hardest hit by the sell-off, slipping 6.4 cents to
$2.295 in active trading.
Some traders were surprised by the market's inability to rally
after the measly 34 Bcf storage injection, which dropped the
oft-quoted year-on-year storage figure to 131 Bcf. However, a Gulf
Coast marketer pointed to the other half of the
equation-demand-which he feels is a bearish factor in the short
term. "Temperatures have moderated considerably since last week.
That coupled with the all the [nuclear units] that are coming back
on line and you have a much different demand component in this
market," he said.
The price drop comes at a time when the market is trying to
assess the uncertainties surrounding supply and demand, both now
and in the months to come, said Tom Saal of Miami-based Pioneer
Futures. "In the meantime, this market may be trying to establish a
trading range," he offered.
For the June contract, the Pegasus Econometric Group pegs that
trading range between recent lows and highs at $2.205 and $2.405
©Copyright 1999 Intelligence Press Inc. All rights reserved. The
preceding news report may not be republished or redistributed, in
whole or in part, in any form, without prior written consent of
Intelligence Press, Inc.