Rescinding gains notched early in the session, natural gas futures plumbed to new week-and-a-half lows yesterday afternoon on the news from the American Gas Association that a meager 45 Bcf was withdrawn last week from underground storage facilities. The January contract settled at $2.616, down 4.1 cents for the session and more than a dime beneath its $2.73 high on the day. The out months sustained a more severe selling punch, led by the February contract which moved to within striking distance of the prompt month by shuffling 6.2 cents lower to close at $2.65.

According to the AGA, a scant 6 Bcf and 2 Bcf were withdrawn from the Consuming Region West and the Producing Region, respectively, with the Consuming Region East accounting for the remaining 37 Bcf. The net withdrawal of 45 Bcf for the country was not only less than the 158 Bcf drawdown from a year ago, but also less than the market’s 50-60 Bcf range of expectations. At 3,061 Bcf, total gas in storage now stands at a record 948 Bcf above year-ago levels and 535 above the five-year average.

According to an AGA spokesperson, the report was delayed due to an internal server error that was compounded by the barrage of hits on the association’s website near 2 p.m. EST Wednesday. All told, the report was delayed about 24 minutes. Since the AGA makes the number available only through its website, the delay affected all redistribution channels.

For Tom Saal of Miami-based Pioneer Futures, however, the delay revealed something about the market’s price inclination. “We inched south for 20 minutes before the storage number was announced,” he said. “The bulls missed a golden opportunity to take the market higher during that period. They blinked and the market turned lower when the number was finally released. It shows that the market was dominated by bears.”

Looking ahead, many traders feel that because the market only had 6 minutes left to trade after the bearish data was released, more downside is possible today. Accordingly, Jay Levine of Advest Inc. sees support first at $2.55-58, followed by $2.48-51. “January terminating in the $2.40-50 range looks like a pretty good bet, although anything can still happen,” he said.

In an effort to enable market participants to execute a trade for anywhere from two to 36 months, the New York Mercantile Exchange announced yesterday that it would introduce strip trading in the first 36 months of natural gas Thursday. In order to prepare for this, the exchange said its web-based Access trading platform would not offer Henry Hub swaps from 9 a.m.to 3:15 p.m EST today.

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