As cooling temperatures were giving heat ravaged areas from theUpper Midwest to the Southeast much needed relief, the natural gasfutures market was doing its own cooling off early yesterday asprices dipped to the lowest level since July 23. The move lower wasshort-lived and after opening at $2.50 the August contract wasunable to attract follow-though selling, leaving buyers to bid themarket higher throughout the rest of the day. The prompt monthfinished up 3.2 cents at $2.575.

Several traders contacted by NGI were surprised by the market’sability to move higher in the face of cash prices that fell anickel or more at most Gulf Coast trading locations. NGI’s HenryHub price for today is $2.51. However, a Dallas-based marketer wasalready looking toward the Wednesday afternoon release of theAmerican Gas Association (AGA) storage report, and thought it wasalready having an influence on the market. “Last year we saw arefill of 70 Bcf, but this year we will be lucky to beat lastweek’s 41 Bcf figure,” she said.

And Raymond James & Associates of St. Petersburg, FL agreesand points to a the U.S average of 98 cooling degree days (CCD) forthe week ending July 24th vs. the normal 85 CCD seen over time.”For that week, the AGA reported only 41 Bcf of gas injections vs.66 Bcf for the same week last year,” the group wrote in Stat of theWeek released August 2. “That means that we could see a sub 40 Bcfgas storage injection number when the data is reported thisWednesday.”

But pre-AGA hype was not limited to cash traders and financialconsultants. A technician with New York-based Trot TradingCorporation was also quick to admit that it is a fundamental factorwhich cannot be overlooked. “Natural [gas] has found a nice littlerange between the mid-$2.40s and low-$2.60s, but the market couldeasily move above or below that level once the report is released,”he speculated. In the meantime, he favors a move back to the upperend of that range as early as today.

As of 7:00 PM last night his prognostication appeared to beright on as buying spilled over into Access trading to propel theAugust contract 2.5 cents higher an even $2.60.

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