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Amid Volatile Times, Futures Take a Day of Rest

Amid Volatile Times, Futures Take a Day of Rest

After tumbling 8.1 cents lower in Tuesday's sell-off, the market seemed to take a breather yesterday with neither bulls nor bears able to influence price movemnet in their favor. The June contract was limited to a tight 4-cent trading range, slipping just 0.8 cents to finish at $2.254. Estimated volume was moderate, with 67,082 contracts changing hands.

A Southeast gas buyer pointed to crude oil futures, which plunged lower after passing below the 40-day moving average Tuesday as a contributing factor to the weakness in natural gas. Looking ahead, he feels that if natural gas is able to move lower it could be hit with the same sort of selling pressure below its own 40-day moving average. June's 40-day average is currently $2.18, while July sits at $2.198. But who is going to push the market down to that level? Locals, he said. "They are always looking to make a preemptive move toward the 40-day moving average."

However, the Pegasus Econometric Group of New York remains bullish and expects a replay of last week's pattern that saw the market rally on Thursday following the release of the American Gas Association Storage report. Although last week's and this week's injection figures of 72 Bcf and 79 Bcf, respectively, fell in the middle of most industry expectations, they both fell short of the comparable refills from last year. At 90 Bcf the year-on-year surplus is below 100 Bcf for the first time since January of 1998.

At first glance Pegasus may be right because the June contract was already 1.6 cents higher at $2.27 at 6:15 EST in last night's Access trading session.

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