After a brief and uninspired upside push was thwarted, naturalgas futures continued lower yesterday as follow-through sellingtook prices to their lowest level since April. No fresh news wasseen influencing prices, and as a result bears remained solidly incontrol, traders said. The August contract finished down an evennickel at $2.141.

Many traders feel that the precipitous price slide has been afunction of speculative fund groups liquidating large net-longpositions. According to the latest Commitments of Traders datareleased last week by the Commodity Futures Trading Commissionnon-commercial accounts were net-long 40,152 as of June 29.

However, a Gulf Coast trader remains unconvinced the selling wasdominated by the funds. “It would stand to reason that they weresellers, but open interest actually increased during Monday’ssession. That leads me to believe that it was fresh selling ratherthan long liquidation,” he said. Where does that leave the market?In a quandary, he continued. “If funds are exiting positions thenthe market should head lower, but I am not convinced they haveabandoned their positions quite yet.”

While bulls may have lacked the impetus to take prices higherduring the regular session Wednesday, they received a helpful boostwhen the American Gas Association (AGA) released its weekly storagedata yesterday afternoon. According to the AGA, 69 Bcf was injectedinto underground storage facilities last week. Falling short inboth comparisons with last year (74 Bcf), and expectations (80-90Bcf), last week’s refill figure was met with immediate buying whenthe market reopened yesterday evening for after-hours Accesstrading. As of 6 PM the August contract had recouped 3.9 cents to$2.18.

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