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Futures Fizzle Ahead of Storage Data

Futures Fizzle Ahead of Storage Data

For the second day in a row, the natural gas futures market was caught in tug of war as traders weighed their options-either buy into the recent rally or sell, expecting a return to the long-standing downtrend. The indecision could be seen in yesterday's price action where prices trended higher in the morning only to turn sharply lower in the afternoon. The May contract finished 4 cents lower at $2.096.

A Houston marketer said the schizophrenic futures activity also could be seen in cash market dealings, which experienced large bid-ask spreads for much of the morning. But in contrast to the futures market, he felt sellers were the winners in cash trading as prices climbed throughout the morning.

Another source said the market was in a holding pattern yesterday ahead of the release of the weekly storage data. "There was a good deal of uncertainty surrounding the size of the injection. Expectations ranged from almost nothing to as much as a 45 Bcf refill."

And although the 30 Bcf injection released by the American Gas Association last night was nestled within the range of expectations, bulls wasted little time last night in claiming it as a victory. The May contract rumbled higher in after-hours trading, posting a 3.4-cent gain to $2.13 by 6 p.m. EST.

Gas in underground storage facilities now totals 1,367 Bcf, 286 more than the same time last year.

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