Taking a cue from stronger cash market prices, the futuresmarket continued higher yesterday as buyers pressed prices throughseveral key resistance levels. After gapping higher on the open at$2.55, the January contract moved mostly sideways before checkinglower to fill in the gap late in the morning. However, from thereit was all gravy for bulls, who bid the prompt month up 7.6 centsto its $2.585 close.
With cash prices trading more than 30 cents above index levels,traders are beginning to speculate about the supply vs. demandsituation this winter. One source believes the robust aftermarketcan be explained by the willingness on the part of producers tolock in a large part of their December supply at fixed price levelsduring bidweek rather than risk another fall-off like the oneexperienced during November. “The pools are more balanced thismonth. And because there is less gas in the swing market, pricesare more susceptible to a change in demand.” And that change indemand, he reasons, can be attributed to temperatures, which areturning from above normal to normal and even below normal in someareas.
Looking ahead, traders will be focused on fresh storage data tobe released by the American Gas Association this afternoon. Mostpreliminary expectations favor a net withdrawal on the order of45-65 Bcf, which would line up with last year’s 49 Bcf pull.However, New York-based Thompson Global Markets favors a netwithdrawal in the 65-75 range, which would be comparable to lastweek’s 69 Bcf pull.
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