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Late Rebound Gives Bulls Hope

Late Rebound Gives Bulls Hope

For the second trading session in a row, early selling pressure was reversed in afternoon trading allowing the market to close near its daily high. The July contract notched a $2.325 low both Friday and Monday, but settled back up above $2.37 both days. Even estimated volume figures were similar with yesterday's 43,630 falling just short of Friday's 45,070 mark.

"Lack of leadership" is how one prominent industry analyst assessed the market's inability to make headway in either direction. "There was no followthrough selling once July dipped into the low $2.30s. There seems to be some trepidation out there ahead of this week's storage report," he continued. Although preliminary estimates are slow to filter through the grapevine this week, some market watchers suggest that figures could be as low as half the 104 Bcf injection from a year ago.

In addition to the storage situation, traders continue to point to cash market prices, which have stayed strong despite the somewhat ambivalent futures market direction, as an indication there is solid demand for physical molecules of gas. Daily GPI's Henry Hub average for today is $2.29, almost a dime more than its Bidweek average of $2.22.

For what it's worth, tropical depression No.1 was upgraded to Tropical Storm Arlene over the weekend. As of 5 p.m. Monday, Arlene was 275 miles southeast of Bermuda and expected to continue to the Northwest. Maximum sustained winds are near 50 mph and tropical storm warnings are in effect for Bermuda. Wind sheering and relatively cool surface sea temperatures indicate the possibility for only minimal strengthening, the National Weather Service said.

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