Fresh after receiving a boost from a hefty storage withdrawalWednesday afternoon, natural gas futures continued higher yesterdayin yet another tumultuous trading session. And for the second dayin a row locals were seen as the catalyst, using buy stops toorchestrate a gap higher opening. But overhead resistance at $1.77held and the market was left to ebb and flow within the 4-centtrading range, which was set in the first hour of trading. TheApril contract finished up 3.9 cents to $1.762.

A Gulf trader summed up yesterday’s chaotic morning. “Localswere out gunning for [buy] stops on the open this morning. Theycarried some length into the session [Thursday] and then proceededto add to that position in early trading. However, they couldn’tget past steady commercial selling, which in turn prompted them tobecome sellers themselves.”

But a Houston marketer said it was a different form of Marchmadness that took hold of New York yesterday afternoon. “Tradinggot really quiet once locals started to make their way over toMadison Square Garden for the Big East [NCAA Men’s Basketball]Tournament,” he explained.

He continued by saying because the technical push has beenrebuffed, the next move will have to come from cash prices, whichare still trading at a discount to April futures. “And if therecontinues to be demand for physical gas then the market should haveno problem closing that price gap. This market is very sensitive tothe weather this month. Numerous utilities from Ohio to theNortheast are pulling max daily requirements from storage in orderto meet their term loads. However, that does not leave them withmuch flexibility for peaking demand and because of that they havebeen forced out into the day and intra-day markets to keep theircustomers whole,” he said. So it becomes a weather market. If theUpper Midwest and Northeast remain cold, then prices will berelatively strong, but if that demand evaporates then prices willbe right back down to index levels,” he said.

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