Propelled by a strong showing in the overnight Access tradingsession, natural gas futures clawed their way higher on the openThursday as short-term traders alleviated oversold positions.

However, the rally was short-lived, and after failing to fill inchart gap resistance up to $7.41, the prompt February contract cameunder selling pressure. By 10:40 a.m. (ET), the February contractwas 26 cents below its $7.40 high on the day. The market reboundedgently from that point forward, closing smack dab in the middle ofits daily trading range at $7.27, a net increase of 32.4 cents onthe day.

After months of hyper-volatility and record-setting pricelevels, traders took advantage of yesterday’s relative calm tospeculate as to the direction of prices. However, in the short-run,there is not much positive for bulls to glom onto. Weather remainsrelatively mild, both outside traders’ windows and also inintermediate-range forecasts.

Meanwhile year-on-year storage comparisons are likely tocontinue to be a wet blanket on prices, as this year’s tallies willhave a difficult time keeping pace with last year’s recordwithdrawals. According to the American Gas Association, last yearthe market had weekly withdrawals of 242 Bcf, 213 Bcf, and 158 Bcfover the next three weeks. Comparatively, the five-year averagedraws for those weeks are 154 Bcf, 156 Bcf and 117 Bcf. Marketwatchers feel that the market will have a difficult time matchingthe five-year average figures, much less last year’s numbers.

Regardless of what happens in the winter months, Tom Saal ofMiami-based Pioneer Futures recommends that buyers step to lock inat least a portion of their summer requirements now, as he believesthose months represent bargains at current levels.

Looking at a July daily chart, Saal notes that both trendlinesupport drawn off the market’s lows, as well as July’s 40-daymoving average, have repeatedly buoyed prices since November.Currently, the 40-day moving average for July exists at $5.321, andthe upward sloping trendline currently comes in near the $5.50level. July’s low Thursday was $5.58.

In daily technicals, February has resistance at the $7.40-41area, which represents the unfilled chart gap from Tuesday. On thedownside, stubborn support is seen at the potential double bottomof $6.80.

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