Warm temperatures in major eastern cities and apprehension aboutthe possibility of “another bullish storage report” gave bulls thereason to buoy the market higher yesterday, and they did notsquander the opportunity. Buying, led mainly by commercial traders,sent the July contract up to a retest of its previous open outcrysession high of $2.41 before settling at $2.407. Estimated volumewas 73,884.

By early yesterday evening it was apparent the bullish storageconcerns were justified. The American Gas Association said that 71Bcf was injected into the ground last week. For the second week ina row that figure fell short of market expectations and refillnumbers from last week and last year of 73 and 106 Bcfrespectively. There is 1,703 Bcf in underground storage facilities,only 36 Bcf more than last year at this time.

Looking ahead, New Mexico-based Kase and Company believes thechoppy trading phase is over now that the market has broken out ofits flag or pennant formation that has formed over the last month.Flags and pennants are chart formations that represent brief pausesin a market move, oftentimes in the opposite direction of theprevailing trend. Kase’s upside target is $2.44, “with reasonableprobabilities of extensions” to $2.50 and even the high $2.50’sfor July.

That bullish prediction was already being played out last night,when the July contract took out their first upside target of $2.44early in Access trading.

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