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After Busy Wednesday, Bulls Take Day Off

After Busy Wednesday, Bulls Take Day Off

"Buy the rumor, buy Access; then sell on Thursday," was one trader's variation on the almost clich‚ "buy the rumor, sell the fact" trading strategy. However, that variation would have been profitable considering the market's price action both before and after the release of the storage report Wednesday evening. After bounding as much as a dime higher in the regular open outcry and Access trading sessions Wednesday, the futures market was shuffled lower yesterday. The July contract finished at $2.397, off a penny for the session.

No fresh news was seen to have an impact on prices in either direction, leaving one Gulf trader to suggest that Thursday's price retracement was caused by light profit taking. Another source agreed, adding that there was some pressure for the cash and futures markets to close some of the current price differential. That differential narrowed from almost 6 cents yesterday to about 4 cents today.

One Houston marketer feels the market's direction today will be a repeat of Thursday's price action: weaker early in sympathy with cash, then recovering late to almost unchanged. The reason for this prediction? Market perception about next week's weather. "The weather for the weekend is going to be mild. However, temperatures are expected to warm up early next week. The last thing you want to be is short over a weekend with warmer weather in the forecast," he concluded.

Looking ahead, he admitted that perception alone will not hold prices up forever. "At some point the market will find out whether warm weather will have a sizable impact on demand for gas. Nuclear utilization is high right now at 79.2% of total capacity. If demand does not increase when it does get hot, it will signal that the nukes are up to the task." And that, he adds "could be a very expensive realization for this market."

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