Daily GPI / NGI All News Access

Dearth of Fundamentals Keeps Market in Tight Spot

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 Bcf.

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

Comments powered by Disqus