For the second day in a row Tuesday, natural gas futuresreceived a strong boost in prices from short-covering activity dueto tropical storm concerns in the Gulf of Mexico. Earl became thefifth named storm in the 1998 Atlantic hurricane season yesterdaywith sustained winds of 60 miles per hour. As of 5:00 P.M. EST Tuesday, Earl was located 240 miles South Southwest of New Orleansand moving toward the Northeast at 12 mph. The October contractopened strong and wasted little time in trending higher before anafternoon sell-off left the market with a modest 3.4 cent gainbefore the closing bell. Estimated volume was a robust 82,172.
Now the question becomes whether the market will be able to holdonto its advances. The prevailing sentiment is for the market tocontinue lower now that the hurricane hype has run its course.However, a Chicago area marketer feels solid electric generation ina market that is already short for the month will be enough to keepthe sellers at bay for a while. “Would you be very quick to shortthis market again after witnessing that move?”
A Houston trader does not rule out the chance for one lasthurrah this morning when trading resumes, but feels the market willcome under selling pressure by mid-morning. “If it looks like abear, and smells like a bear, then sell,” he advised.
He may be right because the October contract had already slipped3.6 cents to $1.75 in Tuesday evening Access trade.
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