Feeding off gains notched during the Wednesday evening Accesssession, the futures market climbed higher yesterday as traderscovered shorts positions created during the recent dip. However,after failing to punch through resistance at $2.70 early, theNovember contract slipped in the afternoon before finishing at$2.642, a 4.1-cent advance on the day.

Most sources pointed to bullish American Gas Association (AGA)data released Wednesday evening as a reason for the advance.According to the AGA, 62 Bcf was injected to underground storagefacilities last week, bringing the total to 2,887 Bcf versus 2,911Bcf at the same time in 1998.

Despite yesterday’s upturn, however, an analyst with NewYork-based Trot Trading Corp. remains pessimistic. “This thingcan’t get much uglier,” said Ira Hochman. “A move below $2.53 couldreally set this price slide in motion. In order for prices toreverse, the bulls are going to have to do some work. Settlementsabove $2.70 and $2.82 would be a nice start,” he said.

While Hochman was focused on $2.53, a Northeast trader pointedto the $2.57 level as crucial. “Seems like everyone I talk to wantsto be a seller in this market, but few actually are. A break belowtrend line support at $2.57 might give them some confidence,” hereasoned.

Susannah Hardesty of Indiana-based Energy Research and Tradingis unfazed by the recent price erosion and feels lows reached thisweek are the final lows of the calendar year. “This is only a shortlived drop and will have no impact on the magnitude of the highsexpected for this fall. Her best estimate for the first fall highis a move by the November contract between $2.90 and $3.15.

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