The June Nymex contract spiraled 8.0 cents lower to $2.130 onWednesday, thanks to what an analyst said was traders unloadinglong positions ahead of the latest AGA storage report. That report,which came in at 78 Bcf, was slightly above the expected range of50-75 Bcf, and nearly double the 46 Bcf report from last year.

With this report, the surplus to last year now stands at 377Bcf. However, even this bit of bearish news was not enough to driveJune below its major support level of $2.11. “That’s a pretty majorsignal that now is a good time to buy,” a trader said. “During thelast 18 months, we’ve had absolutely nothing in the form offundamentals, and yet no contract was able to move below $2.00.That tells you something about the inherent strength in thismarket. Imagine what may happen if we actually get some heat thissummer, or if we hit a hurricane. The market apparently hasn’tforgotten that,” he said.

On the other hand, the huge buildup in long positions by fundswill probably put a cap on the June contract, perhaps no higherthan the $2.32-35 range, a broker said. As a result, he expectsJune to continue its sideways trading pattern until clear cutfundamental direction comes in and pushes June into a new pricetrend. In daily technicals, June has immediate resistance in the$2.26-27 area, a chartist told GPI.

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