June Ekes Out Measly 2.6-Cent Gain on Expiration Day
"Orderly" and "quiet" are not words that typically describe the
natural gas futures market-especially during hectic expiration-day
trading at Nymex. However, yesterday they were fitting descriptions
of a market that was only able to inch higher amid light commercial
short-covering. The June contract closed out its tenure as the
prompt month with a 2.6-cent gain to settle at $2.226.
"[Wednesday's] expiration was as calm as any I can remember, a
Gulf trader said, adding that the choppy buying and selling you
usually see was almost perfectly balanced yesterday.
However, June's expiration was not the only thing on the
market's plate yesterday. Fresh supply and demand data from the
American Gas Association (AGA) and the National Weather Service
(NWS) was released yesterday afternoon. Although that news came too
late to impact the June contract, it did have an immediate bullish
effect on the rest of the Nymex strip. The AGA struck first by
releasing its latest storage report, which featured a 73 Bcf
injection into the ground. However that refill fell short of market
expectations centered on 80-100 Bcf, and last year's 92 Bcf build.
Moments later the NWS released its latest six- to 10-day forecast
calling for above and much above-normal temperatures for almost
three-quarters of the nation extending from west of the Rockies to
the Atlantic Ocean. Only California and Nevada are expected to see
below-normal readings, the NWS said.
The July contract wasted little time reacting positively to the
fundamental news, spiking a nickel higher to $2.26 in last night's
Access trading session. But despite the market's eager gains last
night, a Southeast trader remains bearish. "This is only a
knee-jerk reaction to the storage report. We could retest the $2.30
level, but in the end this market is headed lower," he speculated.
And who will be the ones to push it lower? "Locals who will be
gunning for fund sell stops in the $2.13-16 area," he continued.
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