After see-sawing 2 cents on either side of unchanged for much ofthe Nymex trading session yesterday, the futures market rumbledhigher late in the day to finish near its high. The June contractfinished up 2.9 cents at $2.302, which places it squarely in themiddle of its recent $2.205-$2.405 trading range. Estimated volumewas a relatively light 32,280.

“Apprehensive” was how one Houston trader described yesterday’sfutures market following Friday’s release of fresh Commitments ofTraders (COT) data. The Commodity Futures Trading Commission (CFTC)reported non-commercial net speculative long positions grew almost15,000 to 48,029 since the report was released Friday, April 23.”[Monday] was a key day to qualify the digestion of the COT data,”he continued. “Buyers were very tentative at the outset of tradingbecause they feared the powers that be would try to push the marketlower. Once they realized there would not be a huge sell-off, theybid the market higher into the close.” Despite the speculativesector of the market currently holding its largest position ever,he does not think the market will necessarily drop lower in thenear-term. “Funds typically will roll their positions over a fewtimes before reversing. They are in it not for the quick move,” hereasoned.

Similarly, the Pegasus Econometric Group of New York points tothe market’s inability to rally in the face of the decliningstorage surplus as a function of the already high level ofspeculative long positions. The group expects to see one morebearish storage report this Wednesday when the American GasAssociation releases its weekly report. Last year’s 100 Bcf figurewill likely dwarf this year’s refill, which Pegasus predicts willfall in the 50-70 Bcf area.

Pegasus pegs support at $2.205. Resistance still stands at priorhighs of $2.405, the group said.

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