For the second day in a row Thursday, natural gas futures dippedand rallied within a wide trading band. But in contrast toWednesday’s late price falloff, trading yesterday featured ashort-covering rally before the close that lifted the Januarycontract to its $1.959 settlement price.

A Gulf trader pointed to heavy swing-swap buying by “one of thelarge trading shops” as a supportive factor in yesterday’s market.”Cash prices followed suit and made daily highs near the nominationdeadline,” he said. But despite yesterday’s strength, he would besurprised if prices were able to continue higher tomorrow. “Lookout for [operational flow orders] for weekend gas,” he warned.”Weather is tropical, [local distribution companies] are packed,and there is just nowhere for the gas to go.”

However, a New Jersey trader thinks the short-covering seenThursday could be a sign of things to come. “Locals covered intothe close Thursday after an unsuccessful attempt to take out theWednesday evening Access low. And fund groups could be the nextbuyers in an attempt to fill in a huge chart gap up to $2.19. Butthey will most likely need some colder weather to initiate themove,” he said.

That may not be too far off because parts of the nation areexpected to see cooler temperatures as soon as next week. TheNational Weather Service (NWS) released its latest six- to 10-dayforecast Wednesday which calls for a return to normal temperaturesfor a large swath of the Midwest and Northeast, from Maine down toand including most of Texas. Within that area of normaltemperatures lies a smaller area of below-normal temperatures,extending from Northern Missouri to Eastern Texas. Most of the Westand extreme Eastern seaboard will remain above normal the NWS said.

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