Bears had their choice of reasons for continuing to push thefutures market lower Thursday: forecasts calling for warmingweather, an unremarkable storage report, and follow-through sellingpressure. And so when the February contract opened more than anickel below Wednesday’s low, the price rout was on yesterday. Thesell-off sent the prompt month 9.5-cents lower to settle at $1.836.
Cash prices, which traded into the $1.80s at many key pointsyesterday, also were cited as reasons for the futures decline.”Cash has found a comfort zone in the $1.80-$2.00 level over thepast month. When prices are above $2.00, the storage floodgates areopened and the market is pressured lower. Conversely, when pricesget near $1.80, people are a bit more frugal with theirwithdrawals.” Daily GPI’s Henry Hub index was $1.89 for today.
But despite the chance cash prices will lure the futures marketlower again today, Tim Evans of New York-based Pegasus EconometricGroup looks for light book squaring to gently lift the futuresmarket into the weekend. “Depending on the pervasiveness of thewarmer than normal air next week this market could continue lower,but I wouldn’t bet on additional selling before the weekend. Thereis too much risk the market will rebound if the weather doesn’tshow,” he reasoned. Pegasus places support for February at $1.77with immediate resistance at previous support of $1.84.
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