After opening just below Tuesday’s close, the May futurescontract chopped lazily sideways yesterday before eking out a smallgain before the close. In fact, yesterday’s price action was sosubdued it was hard for some traders to believe it was expirationday at the New York Mercantile Exchange. The May contract completedits tenure as prompt month, expiring at $2.348, up 1.7 cents forthe day.

The calm, however, would not last. Similar to that old sayingabout the weather, the natural gas market yesterday could haveeasily been described with “if you don’t like the price action,wait a minute” because, shortly after the May contract was clearedfrom the board the June contract nearly shot off it. And whereasMay’s precipitous rise-50 cents during its month as the promptcontract-was due to a combination of factors, the quick spikeWednesday was associated with only one. The American GasAssociation (AGA) released its weekly storage report yesterday,which said that only 5 Bcf worth of gas was injected intounderground storage facilities last week. And for the second weekin a row the single digit refill paled both in comparison withexpectations focused on a 30 Bcf build and last year’s 64 Bcfincrease. The June contract quickly took the cue to trade as muchas 7.4 cents higher in last night’s Access session. At 6:00 ESTJune was 4.5 cents higher at $2.386.

A Houston marketer, while being surprised by the low storageinjection, feels it can be explained by a tightening of the12-month strip. “A month ago there was economic incentive to injectgas while hedging it against the November or December futuresprice. Now the opposite is true.” He added that there is even a”sell now inject later” mentality sweeping the market. “There is agrowing contingent that feels that prices are defying gravity uphere. They look to sell it now before it comes crashing back downto earth.” However, he feels this thinking might be a bit skewedand looks for higher prices as people continue to delay theirinjections.

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