Speculative Sell-off Tests Bulls Resolve
Follow-through on the heels of Monday's Nymex strength gave bull
traders an optimistic outlook early yesterday. However, their
euphoria was short-lived when a combination of fund and local
selling pushed the market down near stubborn support at $2.205.
June trimmed its losses into the close, finishing 6.6 cents lower
A technical sell-off was responsible for Tuesday's price
weakness said Ed Kennedy of Miami-based Pioneer Futures. "Locals
were seen pressuring the market lower. Below $2.28 there was a huge
vacuum. Once that level was broken, it uncovered a vacuum [that
was] void of buyers. Funds added to the selling pressure, and the
rout was on," he said. However, the move lower stalled near recent
lows in the low $2.20s, which uncovered light scale up commercial
buying, he continued.
A Gulf Coast trader attributed Tuesday's meltdown to weak
fundamental factors and pointed to nuclear units returning from
planned maintenance. Despite warming temperatures, prices will be
unaffected because nuclear power will supply the bulk of the
electric generation load, he continued.
Looking ahead to today's release of the American Gas Association
storage report, sources expect the report to feature a 50-68 Bcf
injection, which if realized will pale in comparison to last year's
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