Short-Covering Favors Bulls in Quiet Pre-AGA Trade
The futures market continued higher Wednesday in another quiet
trading session where local buying was too much for scale-up trade
selling. But despite its 2.6 cent advance to finish at $2.264, the
July contract fell short of filling in the chart gap up to Friday's
$2.283 low. Estimated volume was a relatively light 56,980.
A Houston-based marketer cited warming temperatures across much
of the central and eastern U.S. as a reason for the price advance.
In its latest six- to 10-day forecast, the National Weather Service
(NWS) looks for above-normal temperatures to cover a huge swath of
the North from New England to the eastern Plains. Above-normal
readings are also expected for most of New Mexico and the western
half of Texas.
Ed Kennedy admits that revised weather forecasts didn't hurt the
price strength, but adds that short-covering ahead of the weekly
supply data from the American Gas Association (AGA) was also a
factor. As it turns out, preliminary estimates calling for 80-90
Bcf of injections last week bracketed perfectly the actual 85 Bcf
figure released by the AGA last night. That figure also fell neatly
in line with last year's 82 Bcf build.
What would it take to put the bulls back at the helm? A move
above $2.30 insists Kennedy. However, he doesn't believe that is a
likely scenario in the near future and thinks prices are
susceptible to another move lower.
©Copyright 1999 Intelligence Press Inc. All rights reserved. The
preceding news report may not be republished or redistributed, in
whole or in part, in any form, without prior written consent of
Intelligence Press, Inc.