After a tempest of trading activity during the first three daysof the week, the futures market settled down Thursday to trademostly sideways amid light volume. Moderate trade-buying below the$2.32 level was the most notable feature of the day. But that wasenough for December to post an up-day-marked by higher highs andhigher lows-to start off its tenure as prompt month. The contractsettled at $2.348, a 2.4 cent gain for the session.

Many traders were still focused on Hurricane Mitch yesterdaymorning, but by afternoon the tempest had been downgraded to atropical storm, which made it unlikely, even if it were to make itinto the Gulf, that there would be considerable supply disruptions.

Without the help of a supply-related boost to prices, bullslooked to the demand side for help with natural gas prices. TheNational Weather Service (NWS) 6- to 10-day forecast for Nov. 3-7may have provided them with the impetus they were looking for. In the forecast released Wednesday, the NWS calls for muchbelow-normal temperatures for a good portion of the southwest US,with below normal readings expected over much of the west, thenortheast, and most of the Carolinas. Above normal temperatures areforecast for the upper-midwest, and Florida.

However, Ed Kennedy of Miami-based Pioneer Futures thinks themarket is still in a wait-n-see pattern looking for heating demandin key gas consuming regions. “What this market needs is anextended period of below-normal temperatures in the upper-midwest.That will force utilities into the spot market for gas purchasesbecause they will be hesitant to withdraw gas now when forecastsare calling for a cold February and March.”

Kennedy continues, saying the $2.25-38 range is a comfortableone for December futures, at least until next week when the marketcould receive direction from either cash prices or a new weatherforecast. But he admits the market is still vulnerable to thedownside and doesn’t rule out a possible retest of $2.25 leveltoday.

Susannah Hardesty of Energy Research & Trading inGreencastle, IN. agrees that the $2.25 level should hold assupport, but extends the upper edge of her range to $2.44. Hardestylooks for range-bound trading as well until there is “a short-termshock of cold weather to remind us that we are heading into awinter dramatically colder than last year, or aggressive spec fundbuying on short term signals.”

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