Fourth Time is a Charm for Persistent Bulls
For the fourth straight trading session, natural gas futures
raced off to a fast start Wednesday as locals and speculators tried
again to push the market through key resistance and above the
recent trading range. But unlike the failure and subsequent selling
that plagued the market on the prior three occasions, yesterday's
market was able to hold on and add to gains late in the day. The
August contract finished at $2.253, up 5.5 cents.
Crude oil futures also played a supporting role in the rebound
yesterday. After cascading lower both before and after the release
of American Petroleum Institute (API) data Tuesday, crude oil
futures made modest gains into the close Wednesday. The real
catalyst may have been natural gas prices in the physical market,
which rumbling higher yesterday morning. NGI's Henry Hub average is
In fact, there was so much new information for traders to digest
yesterday, they almost forgot about the weekly release of fresh
storage data by the American Gas Association. But even a
larger-than-expected injection-78 Bcf-could not dampen the market's
bullish spirit last night in the Access trading session.
After briefly probing lower and stalling, the market was
propelled higher as bulls aggressively bid the August contract 1.5
cents higher. In fact, the buying was so frenzied that one Houston
trader reported 1,700 contracts trading in the first 17 minutes of
the after-hours trading session. If natural gas experienced that
rate of activity over its entire five hour and 10 minute regular
session, the daily volume would surpass 300,000 contracts, which
would easily shatter the current volume record of 168,057.
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