Traders’ opinions have varied as to the direction the futuresmarket would take this week, and so it came as no surprise Mondaywhen it tested both the upside and the downside in early trading.But, when selling dried up below the $2.10 level, the Novembercontract was free to migrate higher to settle at $2.143.

Sources said cash prices that trended higher throughout themorning provided an incentive for the increase. Henry Hub pricesrallied over 20 cents from their early morning levels to trade inthe $1.80s before pipeline nomination deadlines. However,fundamentals were not the sole cause of the strength. Sources alsopointed to buying after November reached its $2.07 low as asupportive technical factor. “We have had a string of higher lowsthe last 5 days, the moment the prices bounced off $2.07, it was aeasy decision to buy the market. November’s daily lows since lastTuesday are $2.03, $2.045, $2.05, $2.05, and $2.07.

A Gulf Coast marketer feels the market has the impetus to trendhigher in the short-term because people “find good value” in cashprices in the $1.60s and $1.70s. “I was a buyer at [Henry Hub] allthe way up [today], and expect futures will follow the cashmarket’s lead Tuesday. However, he remains cautious of a pullbackin November, when the weather moderates after the first real coldblast. “Prices nearly always move up at the first sign of cold, butunless November is somehow able to maintain average and belowaverage temperatures I expect prices to take one more trip lower.”

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