Just as the old saying about the lion and the lamb goes, no onecan ever be sure what kind of weather March will bring. This lackof clear fundamental direction has made its way to the New YorkMercantile Exchange, where the spot April contract was unable tobreak outside of a tight $2.115-$2.205 trading range last week.Since April had virtually no room to move, it is fitting the spotmonth could settle the week only 0.8 cents higher at $2.137.

Despite the fact that Henry Hub cash prices are currently in the$2.20-22 range, many sources feel April will be hard pressed tomatch that level. “April fell immediately after it hit $2.205 onThursday because the fundamentals don’t warrant a move there.Remember, this cold weather in March has nothing to do with whatwe’ll see in April,” a source told GPI.

On the other hand, speculators may give April some downsideprotection as well. The latest Commitments of Traders Report showsthat as of the two weeks ended March 10, speculators went frombeing net long nearly 9,000 contracts to being net short almost4,600 contracts. “That’s a remarkable turnaround in so short atime. It also suggests those specs will be good buyers in the nearfuture. Not many of them may still be holding April, but those thatare will most likely be tempted to cover every time Aprilapproaches $2.105,” a broker said.

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press,Inc.