What do you get when you mix a bull market near its all-timehigh with a potential tropical storm and a large storage refill? Ifyou answered one heck of a 24-hour trading period then you were notalone yesterday as natural gas futures traders experienced atrading day that saw four distinct buying surges and onegut-wrenching sell-off.

In just its second week of overnight trading, the market wasboosted in the Tuesday night-Wednesday morning Access tradingsession as traders hedged against the possibility that theominous-looking low pressure system in the northwest Caribbean Seawill become a tropical depression or storm. By 11:00 a.m., theOctober contract had notched a new all-time prompt month high at$5.17.

As of press time last night, the disturbance had not yetdeveloped a closed surface circulation, but the National HurricaneCenter did not rule out it strengthening into a tropical storm ordepression by this afternoon.

After chopping sideways in the teens early yesterday afternoonthe futures market was rocked again — this time to the down side— when the AGA announced that a whopping 72 Bcf was added tounderground storage facilities last week.

Storage now stands at 2,258 Bcf or 69% full versus 2,668 Bcf ayear ago. And while the 72 Bcf injection was less than last year’s81 Bcf refill during the same week, it was perceived as bearishbased on the fact that it easily surpassed the range of marketexpectation centered on a 50-60 Bcf build.

Minutes after the report hit the market, prices plummeted to the$4.92 level.

Over the last several weeks, traders have been rewarded forbuying the futures market on any and all dips and that strategy wasonce again rewarded yesterday. At the close the October contracthad clawed its way back up to $5.055, a 4.7-cent gain for thesession.

Looking ahead, the New York-based Pegasus Group views the $5.10level as an intermediate top only, and believes that futures willcarry to at least the $5.20-25 area following the break higherWednesday.

As of 7:00 p.m. last night the market was proving the themright, as prices were up another 7.5 cents to $5.13.

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