After etching out a wide, 20-cent trading range Monday andTuesday, natural gas futures traded sideways yesterday in a rare,low volume and low volatility trading session. Little in the way offresh news was seen to nudge prices in either direction, leavingthe November contract to slip 2.9-cents to $2.978 in pre-AGA profittaking. Estimated volume was an extremely-light 53,060 contracts.

Despite the small pull back, a Gulf Coast marketer, who watchedphysical prices eke out small gains for a third day in a row, saidhe’s becoming increasingly bullish on prices this winter. “Rightnow everything I look at both technically and fundamentally pointsto higher prices,” he said.

However, if the market is able to build on its recent advances,it probably will not move in a straight line. “You still have tobuy the dips and sell the rallies,” advised Ira Hochman of NewYork-based Trot Trading Corp. “This market has formed a solid basein the $2.50s, but it is not ready to explode quite yet. There werea number of [local traders] who lost their heads [Tuesday] andtried to take out stops above $3.06. They got hosed when the marketsold off. This thing is headed higher, but buyers had better beprepared for some bumps along the way.”

According to the American Gas Association, 42 Bcf was injectedinto underground storage facilities last week, bringing the totalto 2,978 Bcf versus 3,010 Bcf last year. Although that refill fellin line with preliminary expectations focused on a 40-50 Bcf build,it fell short of last year’s 58 Bcf figure, ending the seven-weekstring of bearish year-on-year comparisons. The bulls were quick toreact in last night’ Access trading session, taking the promptmonth 7.6 cents higher to $3.051/MMBtu.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.