Natural gas futures were nearly unchanged at the close yesterdayas traders grappled with the conflicting fundamentals of storageand weather. By virtue of its 0.3-cent decline to settle at $2.285,January was the only futures contract month to lose ground. Incomparison, both the February contract and the 12-month strip wereup 0.6 cents for the session to $2.322 and $2.401 respectively.

Coming into the session, traders were generally in agreementthat Thursday would be a real tug-o-war between weather bears andstorage bulls. Despite the above-normal temperatures last week, theAmerican Gas Association estimated that a hefty 69 Bcf was pulledfrom underground storage facilities. However, that price-positivenews was dampened somewhat by weather forecasts calling for acontinuation of warm temperatures.

After a stronger open, the prompt month fell just short offilling in the chart gap up to $2.325. From there the marketchecked lower only to rebound to unchanged in the afternoon.

Looking ahead, one technician contended the unfilled gap between$2.32 and $2.325 is a conspicuous upside objective for today’ssession.

Ira Hochman of New York-based Trot Trading Corp., on the otherhand, points higher to the $2.345 level as an important hurdle forthe January contract. On the downside, $2.17 is a key level ofsupport. However, if the market is to break in either direction, itwill likely need the help of local traders, who have been notablyabsent from the market over the past week. Only once so far inDecember has the Nymex traded more than 70,000 contracts.

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