Natural Gas futures rallied again yesterday as traders reactedto colder-than-expected temperatures throughout much of the Midwestand Southeast. And similar to advances made last week, Monday’sprice action was fast and furious with the February contractleading the way and gapping 6 cents above Thursday’s high. However,once the $2.085 high for the day was reached about 10:30 EST, theprompt month was left to move sideways within a narrow trading bandfor the rest of the session, notching a 12.6-cent increase tofinish at $2.071.
In addition to the weather, traders said cash prices, whichtraded up more than 20 cents on many pipes, made the futures marketan easy buy.
But despite the fundamentally driven gains over the past threetrading sessions, a Houston trader remains technically bearish onprices. He points to the market’s inability to sustain a move abovethe $2.00 level over the last 50 or 60 trading days as indicationof what could lie ahead.
“Given the choice, would you have rather owned or sold gas atthe $2.00 level over that period?” he asked rhetorically. “I thinkthis rally is no different from ones in November and December and Ilook for cash prices to back off a nickel or so [Tuesday] whenmoderating temperatures take back some of the Texas and Oklahomaintrastate demand.
And looking ahead, normal and above-normal temperatures may behere for at least awhile. The National Weather Service (NWS) 6- to10-day forecast released yesterday calls for a gradual warm-up formost of the nation by next week. Only the snow-swept Great Lakesregion will retain below-normal temps during that period, the NWSsaid.
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