Storage, Cooler Weather Usher Futures Lower
Fresh news means everything in commodities trading and natural
gas traders had their choice of bearish factors to point to
yesterday. The one-two combo of the storage surplus and cooler
weather put sellers in the driver's seat once again, and they
reacted swiftly Wednesday evening by pushing the market lower in
the after hours Access trading session. The July contract Thursday,
tumbled 10.5 cents to finish at $2.355 in heavy trading.
The American Gas Association was the first to strike Wednesday
when it released what many traders thought to be an undeniably
bearish storage report, featuring a 91 Bcf injection. But before
traders had a chance to digest the storage Wednesday, The National
Weather Service (NWS) hit the market with more negative news. In
its latest six- to 10-day forecast, the NWS looks for below normal
temperatures for the huge gas consuming swath that stretches from
Texas to Virginia.
And the three- to five-day forecast isn't any better. "Last
weekend you were a fool to be short. This weekend you're a fool to
be long. Weather is due to moderate, and that will not bail out
prices like it did last Friday," he said.
However, a western trader fears prices are headed higher and
believes now is the time to lock in winter requirements. "Any pull
back [in prices] will be met by aggressive buying by those who have
been sidelined during this artificially inflated rise in prices."
Looking ahead, several market watchers feel the market may have
to wait until early next week for some positive news. Although it
is too early to tell, some believe it is possible for next week's
storage refill to be about half the comparable 108 Bcf injection
figure from the same week last year.
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