Fueled by a smaller than expected storage injection figure,natural gas futures continued higher yesterday morning asspeculative buying easily erased the Wednesday evening price dip.The buying pressure continued throughout much of the day as bullshad their sights squarely set on last week’s high of $2.72. Theirpersistence paid off, and shortly after 1 p.m. the prompt monthpunched through and notched a $2.75 high on the day. However, notenough follow-through buying was seen entering the market, and theresulting sell-off deposited prices back down near unchanged forthe day. The August contract finished just a half-penny higher at$2.647.

“What a waste,” commented one trader who almost felt sorry forthe buyers who spent the entire day pushing prices higher only tosee the market come crashing down late in the session. “They addedto their length on each little pullback throughout the day, andthat strategy was successful until it became apparent that themarket wasn’t going to settle above $2.72.”

However, Ed Kennedy of Miami-based Pioneer Futures feels themarket’s ability to make a new high was constructive for prices anddoes not rule out a retest of the $2.72-75 level. But first themarket may have to move lower and possibly as low as the mid- toupper $2.50s before such a rally is possible, he said.

But now that this week’s AGA storage report (featuring a scant26 Bcf injection) has been digested, bulls are starting to wonderwhen and from where the next piece of bullish news will come. AGulf Coast marketer feels that fear of supply disruptionsassociated with hurricanes have helped prop up the market. “It’sstill pretty early in the season. There have been two hurricanes inthe Pacific and two tropical storms so far in the Atlantic, butnone of the have come close to us. September is supposed to be thebusiest month for hurricanes and that is never far from people’sminds.”

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