Adding to double-digit gains achieved Wednesday, the futuresmarket plodded higher Thursday when short-covering activity boostedprices in light, pre-holiday trading. The move left February with atwo-day gain of 16.4 cents, a feat January could not muster duringits entire reign as prompt month.

Sources agreed Thursday’s short covering was in response to thelarger than expected storage withdrawal reported by the AmericanGas Association. The association said gas in underground storagedecreased by 167 Bcf to a current level of 2.8 Tcf as of Dec. 25.

However, a Chicago-area utility buyer said that the report wasnot a surprise to him and he expects the large withdrawals tocontinue for the month of January. “There is just too much gas inthe ground right now.”

One Chicago marketer has a much more technical outlook. He saidalthough it is still too early to make a call on February’sdirection, the move to the mid-$1.90s Thursday was veryconstructive. “The $1.95 level basis-February is significantbecause it represents the midpoint of the recent $1.77-2.14 tradingrange. The market is now at a crossroads. If we gap above thatlevel Monday, it could signal a short-term reversal, but if we staylower on the open, the market would be a good selling opportunity.”

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