After tumbling 8.1 cents lower in Tuesday’s sell-off, the marketseemed to take a breather yesterday with neither bulls nor bearsable to influence price movemnet in their favor. The June contractwas limited to a tight 4-cent trading range, slipping just 0.8cents to finish at $2.254. Estimated volume was moderate, with67,082 contracts changing hands.

A Southeast gas buyer pointed to crude oil futures, whichplunged lower after passing below the 40-day moving average Tuesdayas a contributing factor to the weakness in natural gas. Lookingahead, he feels that if natural gas is able to move lower it couldbe hit with the same sort of selling pressure below its own 40-daymoving average. June’s 40-day average is currently $2.18, whileJuly sits at $2.198. But who is going to push the market down tothat level? Locals, he said. “They are always looking to make apreemptive move toward the 40-day moving average.”

However, the Pegasus Econometric Group of New York remainsbullish and expects a replay of last week’s pattern that saw themarket rally on Thursday following the release of the American GasAssociation Storage report. Although last week’s and this week’sinjection figures of 72 Bcf and 79 Bcf, respectively, fell in themiddle of most industry expectations, they both fell short of thecomparable refills from last year. At 90 Bcf the year-on-yearsurplus is below 100 Bcf for the first time since January of 1998.

At first glance Pegasus may be right because the June contractwas already 1.6 cents higher at $2.27 at 6:15 EST in last night’sAccess trading session.

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