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Bulls, Bears In Market Standoff

Bulls, Bears In Market Standoff

After watching the market free-fall 7.1 cents to kick off the week, bulls dug in their heels Tuesday at Nymex. While they weren't able to recoup much of Monday's declines, they did prevent any further losses. As a result, the futures market was stagnant yesterday, with the July contract limited to an extremely tight 3-cent trading range before settling up 0.1 at $2.238.

Tuesday's quiet market gave traders the opportunity to hypothesize about the direction of the July contract heading into its expiration next Monday. And while the consensus is far from unanimous, most think bearish fundamental factors should continue to usher the market lower. "Weather is mild, storage is neutral and there are no hurricanes to speak of," a Texas marketer surmised.

On the other hand, the technical picture is still a little nebulous. The New York-based Pegasus Econometric Group believes that since the market touched the upper edge of support that exists from $2.21 down to $2.17, there is a fair chance for a rally before or after today's release of fresh American Gas Association storage data. "Heating demand may have limited refills to less than the 82 Bcf from a year ago, in which case the market could see some turbulence off the report. We want to be prepared for injections of 70 Bcf or less, just in case," the group wrote in its June 22 Power Report. Other preliminary estimates for today's storage refill center on the 80-90 Bcf range.

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