Daily GPI / NGI All News Access

Bears Draw First Blood, Send June Below $2.20

Bears Draw First Blood, Send June Below $2.20

Following last Friday's near price-stalemate, bears were quick out of the blocks yesterday, and within the first hour of trading the June contract reached it's lowest level since April 19. The market received a slight buying boost before the noon hour, but sellers were at it again yesterday afternoon, carving out a $2.145 low in choppy trading activity. The June contract finished at $2.176, down 4.9 cents for the session.

Sources felt yesterday's price erosion was a combination of continued technical weakness mixed with a rapidly deteriorating fundamental picture. "There was nothing positive to look at today, one commercial trader lamented. "Nukes keep coming back up and there is very little electric demand in the Ohio Valley or Northeast. Texas is hot, but we can't carry the market by ourselves." He also said storage buying, which supported physical prices during the first 20 days of May, is almost non-existent now.

Looking ahead, Tim Evans of New York-based Pegasus Econometric Group believes that the market's recent losses might be more serious than just a pre-expiration sell-off. July, he argued, could be dealt a blow to its self-esteem just minutes after June is cleared off the board Wednesday when the American Gas Association storage report is released. "An injection of more than 100 Bcf would be a real slap on the nose for this market." While Evans does not rule out the possibility of a triple-digit build, he feels that a refill on the order of 80-100 Bcf is more likely. The comparable figure for last year is 92 Bcf.

©Copyright 1999 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1231
Comments powered by Disqus