August Upstages July on Expiration Day
The stage was set for expiration day pyrotechnics Monday at the
New York Mercantile Exchange. Bulls were confident they could add
to the string of five higher highs and higher lows notched on the
daily charts last week. On the other hand, bears believed the
confluence of mild temperatures and follow-through on the heels of
Fridays price erosion would set the tone early yesterday. They were
both wrong. Except for a late and almost inconsequential blip
higher, the July contract was a model of stability yesterday, where
buying and selling matched up nearly perfectly. July closed out its
tenure as spot month up a meager 0.4 cents to settle at $2.262. The
August contract finished up 3.2 at $2.324.
Cash prices for both June and July moved higher as well
yesterday as traders scrambled to find gas for electric generation.
Looking ahead, many traders feel that weather will continue to play
a major role in the direction of the market. "There are some
marketers that are rolling the dice this month and betting on mild
weather in July. And if the weather continues like it has been,
that will be a smart move. However, if July stays hot, look out," a
Houston marketer said.
For at least the first week of July, it appears temperatures
will stay on the warm side. In its latest six- to 10-day forecast
the National Weather Service (NWS) calls for a huge section of the
country to experience above and much-above normal temperatures.
Only Florida and the Northwest are expected to see below normal
temps, the NWS said.
Despite the above-normal temperatures, New Mexico-based Kase and
Company looks for prices to steadily continue lower, possibly
reaching the $2.025 level.
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