Propelled by a technical boost following Monday’s 23-centdecline, the natural gas futures market rallied during the firsthour of trading Tuesday as traders took profits on newlyestablished short positions. But after peaking at $2.31 momentsafter 11 A.M. EST, the December contract once again fell victim tothe same negative weather pattern that has weighed on prices theentire month. That downward momentum quickly took back the earlieradvances, depositing December to $2.189, down 0.8 cents for theday.

Now with only an abbreviated, three-hour trading session beforethe final December price is etched in stone, traders wonder if themarket will continue lower amid the larger downtrend or rebound onlast minute bullish heroics. On balance, most traders favor theformer scenario and believe that the cash market will be thecatalyst with physical prices running some 20 cents below Decemberfutures.

Meanwhile, technical factors were not much better, according toCynthia Kase of New Mexico-based Kase and Co. “We had a gap open;[Tuesday] traded higher and then not only closed the gap, but madenew lows — not a good sign. If we were going to have a shortcovering rally, the up gap should have set it off. I’d be surprisedto see more than a 10 to 15 cent blip, if we get one at all.”

And Tom Saal of Miami-based Pioneer Futures echoes thatsentiment. “Ultimately, the flow of orders will dictate the price,but I would not bet against the trend right now.” Because of thathe looks for December to limp lower into expiration, settlingsomewhere in the teens.

However, New York-based Thompson Global Markets believes thatonce December is off the board, January will feature a new outlookfueled by positive year-on-year storage comparisons. The first ofwhich could come tomorrow afternoon when the American GasAssociation will release fresh storage data. TGM believes thatreport will feature a 20-40 Bcf withdrawal versus 13 Bcf a yearago. Saal, on the other hand, looks for a net injection of 2 Bcf.

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