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Futures Eke Out Small Gain in Quiet Session

Futures Eke Out Small Gain in Quiet Session

Follow-through on last week's gains and record-setting temperatures put bulls squarely in control Monday in the Nymex gas pit. Locals and commercials were good buyers in the first hour of trading yesterday as they buoyed the market to its highest level in six months. However, after the initial surge the market could not attract fresh buying and was left to chop sideways amid a relatively light 59,236 in estimated volume. The July contract finished at $2.442, up 0.5 cents for the day.

A Gulf trader was surprised the futures market was unable to tack on more substantial gains in the face of spiking physical power and gas prices. Transco Zone 6 NY prices for today's delivery traded as high as $2.86 and Nepool power prices were quoted as high as $1,000.

However, a Houston-based marketer felt natural gas prices "were simply playing catch up" Monday after having lagged the futures market for the first part of June. Looking ahead, he feels because cash prices have narrowed the gap the burden now lies on the futures market to make the next move.

If futures are able to press higher, the July contract will encounter resistance at $2.50, ahead of more selling up to $2.64, according to New York-based Pegasus Econometric Group. On the downside, support exists at $2.36.

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