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Subdued Futures Trading Ahead of AGA Data
Following two days of active trading and sizable price swingsthe futures market traded quietly to either side of unchanged onWednesday. September futures closed at $1.819, managing a 0.7-centgain on the day.
Several traders contacted by NGI cited uncertainty surroundingthe American Gas Association storage report released Wednesdayafternoon as a reason for the cautious trade. That estimate,featuring a net injection of 75 Bcf, fell in line with industryexpectations in the 55-80 range, but did manage to trim theoft-quoted year on year surplus by 3 Bcf.
However, Pegasus Econometric Group feels the National WeatherService 6-10 day forecast calling for below normal temperaturesover a large section of the south including Texas is moreindicative of market direction. In their Natural Gas Report datedAug. 12, the group states “Given the choice between a focus on lastweek’s weather the natural gas market normally chooses to lookahead and, with cooler temperatures expected in the south, that’sbearish.”
Furthermore, Pegasus targets Tuesday’s $1.78 low which matchesthe March 1997 bottom as the next hurdle to the downside. IfSeptember falls through $1.78, it may attract a fresh round ofselling, the group explained.
As of 5:30 EST September was 3.2 cents lower to $1.787 inWednesday evening Access trade.
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