For the second day in row Wednesday, natural gas futures werelimited to small gains amid a quiet trading session. The Februarycontract finished up a penny at $1.827 in the regular tradingsession.

Several sources polled by NGI said the market continued higherfollowing February’s rebound above support in the mid-$1.70s. A NewJersey analyst agreed that yesterday’s strength was, in part, dueto a technical bounce, but warned that the market is not out of thewoods yet. “This market is starting to look up on the daily charts.A move above the $1.87-88 level would confirm a short-termreversal, but I wouldn’t bet the farm solely on that. This marketwill also need help from weather and storage in order to sustain arally.”

However, he may have gotten at least one of those conditionsyesterday when the American Gas Association released its weekly gasstorage information. The AGA estimated 203 Bcf was withdrawn fromstorage for the week ending Jan. 15, which was greater than mostmarket expectations in the 160-200 Bcf range. The February contractreacted accordingly, pressing another 2.8 cents higher to finish at$1.855 in last night’s after-hours trading.

Gas storage levels currently are 372 Bcf ahead of levels at thesame time last year and are 400 Bcf ahead of the four-year average.The AGA-designated Producing Region holds the greatest surplus, 220Bcf ahead of last year’s levels and 203 Bcf ahead of the four-yearaverage. The Consuming Region East holds the smallest surplus atonly 25 Bcf ahead of last year. And the Consuming Region West is127 Bcf ahead of levels at the end of the same week in 1998.

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