After watching the market tumble almost 85 cents from its highsin just a week and a half, bargain hunters were back at it againMonday, lifting natural gas prices back above the psychologicallyimportant $5.00 level. After checking down to $4.86 and etching itslowest mark since Sept. 1, the November contract rallied late inthe session to close 13.5 cents higher at $5.072.

“They have been rewarded for buying dips so many times sinceprices began the year at $2.20, it was a no-brainer [Monday],” aGulf trader said. “The move lower got a little overdone last week.What you saw [Monday] was natural.”

Other sources were quick to point to crude oil futures, whichfinished up 81 cents at $33.76 on heightened Middle East tensions,as a reason for the price rise. However there were opponents ofthat theory as well. Several traders noted that natural gas pricestumbled last week while crude oil prices were on the move higher.”People love to blame crude whenever natural gas moves in the samedirection. What about all the times the markets move in oppositedirections,” a trader asked.

Looking ahead, Cynthia Kase of New Mexico-based Kase and Companyremains pessimistic of further advances and targets a downsideobjective of $4.51 basis November. “If the market is to remainnegative, $5.22 should hold resistance, but a bounce to $5.32 couldtake place on emotion and the downward bias remain intact,” shewrote in her Oct. 20 Gas Fax.

And technicals may not be the only factors pointing to lowerprices. Traders agree that in order for prices to remain at theselofty levels, the market needs almost a daily infusion of freshbullish news. However, that may be difficult with weather andstorage likely to continue to favor bears’ view. Fresh storagenumbers will be released tomorrow afternoon and early talk favorsan injection of 50-60 Bcf, which if realized, would dwarf the 13Bcf injection seen this time a year ago. Also negative is thelatest six- to 10-day weather outlook, which calls for above-normaltemperatures from the Northeast all the way down the Mississippiand Ohio River Valleys to east Texas.

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