Fueled by forecasts calling for below-normal temperatures andboosted by technical factors, which have suddenly turned verybullish, natural gas futures rumbled higher yesterday as traderstried their hand again at the long side of the market. Aftergapping convincingly higher on the open, the December contractnever looked back as prices drifted 23.2 cents higher to close at$5.081.

Heading into Tuesday’s session, traders were mixed as to what toexpect following Monday’s retracement. While some wereunflinchingly bullish for technical reasons, others were bearishciting storage concerns and lack of cool temperatures in theeastern half of the U.S.

Tom Saal of Miami-based Pioneer Futures was squarely in the campof the former and noted that the market was very oversold ahead andthus primed for a short-covering rally Tuesday.

Susannah Hardesty of Indiana-based Energy Research and Tradingagreed, adding that fresh weather forecasts released both Mondayand Tuesday afternoon cemented the bullish sentiment. “Monday’spullback was simply that, a short-term pullback in prices, not areversal to the downside. What is needed is confirmation of thecold weather that Jon Davis and Strategic Weather Services areprojecting. And that confirmation may have come [Monday] afternoonin the NWS 8 – 14 day outlook, with below normal conditions overmost of the country.”

That longer-range forecast was corroborated Tuesday afternoonwhen the NWS released its latest six- to 10-day outlook, whichcalls for nearly the entire U.S. to experience below-normaltemperatures through at least next week. In fact, the onlyabove-normal temperatures will be seen in southern Florida, whichdoesn’t see much heating demand anyway.

Looking ahead, Hardesty believes that this move above $5.00 hasturned the market technically bullish and she recommends thatbuyers that have not already filled their winter requirements, doso now.

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