To say the weekly storage report has had an impact on thenatural gas futures market lately would be a gross understatement.Following an impressive 69 Bcf injection on Sept. 1, the futuresmarket dropped 26.6 cents the very next day. Then a week later,following the release of a relatively small 66 Bcf refill, themarket took a wild, 24-cent ride higher to close the session in themid-$2.80s. Now, a week later the question that everyone is askingis whether we will see another big move today. At first glance theanswer to that question was a resounding “yes” because shortlyafter the storage figures were released the October contracttumbled a dime lower in after-hours Access trading.

However, the price action yesterday was not entirely negative.In fact, several traders contacted by NGI were impressed by themarket’s ability to move higher during the regular session after alower opening. The October contract climbed from a $2.56 open tonotch a high of $2.70 before settling at $2.628, a 0.8-cent declinefor the day. “Looks like locals tried to push [the market] higherto fill in the chart gap,” said Ira Hochman, a technician with NewYork-based Trot Trading Corp. “But they couldn’t get a fill and aslong as we are below that level the bears are in control,” headded. Looking ahead, Hochman sees more room to the downside in theshort-run, but believes the market could still mount anotherattempt at prior highs above $3.00. On the downside he points tothe $2.40-42 and $2.32-33 levels which correspond to chart gapsfrom the daily continuation and daily October charts, respectively.”If the market stays above those levels, it could build afoundation to move higher,” he said.

According to the American Gas Association, 81 Bcf was injectedinto underground storage facilities for the week ending Sept. 10,bringing the total to 2,668 Bcf, which is 109 Bcf less than a yearago. That refill was more than both expectations centered on a65-75 refill and last year’s 70 Bcf build. At 7:00 p.m. last nightthe October contract was down 9.1 cents to $2.537.

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