After a weather-delayed opening, natural gas futures checkedmostly sideways Tuesday despite the presence of some moderatelybullish weather and storage news. After carving out its narrow5.5-cent trading range during the first 30 minutes of trading, theApril contract shuffled sideways to close 2.1 cents lower at$5.315.

Traders were quick to point to supportive weather, both rightnow and also in the latest forecast, as undeniably bullish factorsTuesday. While deep snow was piling up in the Northeast yesterday,the latest intermediate-term weather forecasts were calling for alarge area of below normal temperatures across the central U.S.

For Tim Evans of New York-based IFR Pegasus, however, it is notnecessarily the weather’s impact on gas stocks now, but rather itsimpact on refill schedules this summer that is cause for attention.”Heating degree day accumulations are now running safely above yearago levels and we anticipate supportive increases in theyear-on-year storage figures for at least the next two reports.”

Evans looks for a net 70-90 Bcf draw in tomorrow’s AGA report toeasily surpass last year’s 37 Bcf takeaway. Further out on thehorizon, it is probable that next week’s withdrawal will dwarf the31 Bcf seen last year, he continued.

“Although the weather outlook may not be cold enough to sparkworries about the balance of the heating season, we think utilitiesmay soon lunge into the forward market to lock up $5.50 gas for thesummer, equating to a $55 per MWh cost in a market that couldeasily be trading three times that amount when the heat arrives.”

©Copyright 2001 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.