After twice failing to bust through stubborn resistance at$4.48, natural gas futures gave back early session advancesyesterday to finish just about unchanged on the day. A slim loss inthe September contract was more than offset by modest advances inthe out months. While September finished 0.7 cents lower at $4.406,the 12-month strip was up 2.6 cents at $4.099.

Sources agreed futures were unable to hold on to morning gainsfor two reasons — weak cash prices and strong overheadresistance. While cash prices were able to post double-digit gainsat many pricing locations, they failed to keep pace with the 17.9cent futures run-up seen Wednesday. Henry Hub cash for today’sdelivery was up 13 cents at $4.36, about a nickel under yesterday’sSeptember futures close. However, fundamentals were not the solefactor influencing futures yesterday. A technician noted that theSeptember contract met with substantial selling as it approached$4.50 yesterday. Traders were trying to trigger buy stops that theybelieve to exist above $4.50, but the sellers came out in theafternoon and the market never had a chance, he said.

With little else to talk about yesterday, traders had alreadybegun to speculate on the market’s direction heading into thewinter. For Tim Evans of New York-based Pegasus Econometric Group,that direction is likely up, providing the market can hold abovekey support at $4.20. “The upturn of the $4.20 support suggest thatthe market will be able to consolidate successfully in the $4.20-62range, with an eventual upside breakout leading to much higherlevels. In time, we think psychological resistance at $5.00 andprojected selling in the $5.20-40 zone could come into play,” hewrote in Pegasus Natgas Report yesterday.

©Copyright 2000 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.