Bulls, Bears In Market Standoff
After watching the market free-fall 7.1 cents to kick off the
week, bulls dug in their heels Tuesday at Nymex. While they weren't
able to recoup much of Monday's declines, they did prevent any
further losses. As a result, the futures market was stagnant
yesterday, with the July contract limited to an extremely tight
3-cent trading range before settling up 0.1 at $2.238.
Tuesday's quiet market gave traders the opportunity to
hypothesize about the direction of the July contract heading into
its expiration next Monday. And while the consensus is far from
unanimous, most think bearish fundamental factors should continue
to usher the market lower. "Weather is mild, storage is neutral and
there are no hurricanes to speak of," a Texas marketer surmised.
On the other hand, the technical picture is still a little
nebulous. The New York-based Pegasus Econometric Group believes
that since the market touched the upper edge of support that exists
from $2.21 down to $2.17, there is a fair chance for a rally before
or after today's release of fresh American Gas Association storage
data. "Heating demand may have limited refills to less than the 82
Bcf from a year ago, in which case the market could see some
turbulence off the report. We want to be prepared for injections of
70 Bcf or less, just in case," the group wrote in its June 22 Power
Report. Other preliminary estimates for today's storage refill
center on the 80-90 Bcf range.
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