Dearth of Fundamentals Keeps Market in Tight Spot
The natural gas futures market made it a 'perfect ten' yesterday
by trading within a tight 14-cent range for the tenth consecutive
trading session. The August contract showed promise early, racing
out to a strong start and posting a $2.239 high. That, however,
would be the best the market could do Tuesday. It then wilted under
selling pressure in the afternoon. The prompt month finished at
$2.198, down 0.9 on the day.
A Dallas-based trader viewed the market's move toward resistance
at $2.25 Tuesday as a seller's opportunity. "Prices have found a
comfort zone between $2.13 and $2.23. This is a day traders'
market-sell rallies and buy dips," she advised. And what about
prices in the intermediate- to long-term? "Bullish," she answers,
noting that almost any change in the fundamental outlook could have
a positive price impact. "Right now, the market has nothing to sink
its teeth into. Weather is benign and there are no storms to speak
of in the Gulf [of Mexico]. But if the weather heats up or if we
get some waves with potential in the Caribbean then this thing
could take off," she speculated.
The market may not have to wait for the weather to get a bullish
push. Many traders feel the weekly American Gas Association storage
report to be released this afternoon could bring some
price-constructive news. Preliminary estimates call for an
injection of 55-75 Bcf to fall short of last year's 79 Bcf refill,
thus increasing the year-on-year deficit, which now stands at 17
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