Fueled by the season’s first hurricane hype and gains tacked onduring the Wednesday evening Access trading session, natural gasfutures gapped higher for the second day in a row yesterday asshort-covering and fresh buying created a tempest of bullishtrading activity. That buying pressure continued throughout much ofthe session, allowing the September contract to notch a new high of$2.905 before finishing at $2.898, up 10.6 cents from Wednesday’sclose.

For the past couple months bullish analysts and traders haveruminated over the price spike that would accompany the first newsof a potential hurricane. However, few expected two relativelysmall storms would produce a two-day, 23-cent price rally.

Tropical Storm Bret became the second named storm in the 1999Atlantic Hurricane season, according to the National HurricaneCenter. As of 5 p.m. EST Bret was located in the Bay of Campecheabout 110 miles east-northeast of Veracruz, Mexico and was driftingvery slowly to the northwest. Meanwhile, tropical depression four,which formed off the coast of Africa Wednesday, was moving towardthe west at 9 mph. Both storms are expected to strengthen withinthe next 24 hours.

“It may be a little bit more than your typical hurricane hype,”says Tom Saal of Miami-based Pioneer Futures. “Typically you get arally and then a sell-off. Today all we saw was a rally,” he saidpointing to a steady stream of short-covering. “Whenever you makenew highs in a contract, all the shorts are suddenly in the red.Now they are in the red with two storms out there.”

Looking ahead, Saal looks for more of the same today andbelieves that short-covering could propel prices toward the $3mark. There have been only three times the futures market hastraded to these levels. That means it’s difficult to pick a top andthe market can move abruptly in either direction, he said.

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