Ending a two-day, 24-cent price slide, natural gas futuresclawed higher yesterday as traders covered shorts ahead of theweekly American Gas Association storage report. However, thatbuying interest came to a sudden halt mid-afternoon Wednesday whenthe National Weather Service issued another bearish weather report.Prices quickly tumbled lower into closing bell, trimming profitsfrom more than a nickel to 1.5 cents before settling at $2.657.

For the third day in a row, August-like temperatures across muchof the U.S. put a decidedly bearish slant on the physical market.Sub-$2.40 prices at the Henry Hub are now about 65 cents less thanfirst of month prices, trading at their lowest levels since thesecond week of October. But despite the weakness in cash, futureswere buoyed by short-covering for much of the session yesterday.And Wednesday’s advances appeared to be a lock until shortly after3 p.m. EDT when the NWS released the latest six- to 10-dayforecast. The forecastcalls for above-normal temperatures tocontinue over a large area of the country. Only the East and WestCoasts are expected to experience below normal readings, the NWSsaid. “Short covering had the market moving up until four minutesafter 3 p.m. when the new forecast was released, said Ed Kennedy ofMiami-based Pioneer Futures. “The market sold off hard from there.”

However, the negative weather forecast may have been at leastpartially erased from traders’ minds shortly after the closeyesterday. According to the AGA, 12 Bcf was injected intounderground storage facilities last week, and although that comesin a the top end of the 4-13 Bcf range expected, it falls far shortof last year’s 34 Bcf injection tally. At least initially, thatappeared to be positive and the market reacted accordingly bypressing 2.6 cents higher to $2.683 in last night’s Access session.

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