The futures market was perched at a precarious position cominginto trading Monday. Last week’s precipitous decline had positionedthe spot February contract near its all-time low of $1.77, leavingsome traders to suggest that Monday’s price action could dictatethe course of trading for the rest of the week. A move below $1.77could open the door for fresh selling, while a rebound above $1.77might prompt short covering. And although Monday’s move below the$1.77 level did not entice the cascade of selling some expected, itdid signify that the bears are not finished yet. February endeddown 5.1 cents to $1.779 after trading to a $1.74 low.

However, a North-Houston trader warned that February’s 5.5-centtrading range yesterday was a bit deceiving. “The market traded ina tight 3-cent range from $1.76 to $1.79 for almost the entiresession yesterday. A big sell-stop triggered at $1.765 early tookthe market down briefly to $1.74 before profit-takers bid it backup.”

Sources also pointed to the cash market, which slipped onlyslightly in most points, as a reason for the lack of furthersoftness in futures prices.

Despite the relative price-stickiness yesterday, the traderfeels that the abbreviated trading session this Friday ahead of thelong holiday weekend may present the opportunity for cash prices tousher futures lower. “It will be a buyers market on Friday, andthat could set the price slide into high gear,” he reasoned.

But in order for prices to continue lower, the market will firsthave to get past what many traders feel will be an “enormouswithdrawal” seen in this Wednesday’s American Gas Assocationstorage report. One marketer is looking for a 260 Bcf drawdown dueto the record setting temperatures last week. But will a number ofthat magnitude represent a good buying opportunity? Hedoesn’tthink so. “There are plenty of traders like myself just waiting tosell the pop if it comes at all.

Natural gas futures at Nymex will close at 1 P.M. EST Fridaybecause of the Martin Luther King holiday next Monday. Althoughthis is the first year the energy markets will close early thetrading day prior to selected holidays, it has been a practice inthe metals’ markets for a number of years at Nymex, spokeswomenNachamah Jacobovits said. In addition to Friday, energies willclose early on Friday’s Feb. 12, May 28, Sept. 3, and Wednesday,Nov. 24.

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