Adding to late session advances made in both regular and Accesstrading sessions Tuesday, natural gas futures pressed higheryesterday morning as local traders bid the market to fresh highs.However, once above the $3.10 level, the buying dried up openingthe opportunity for an aggressive sell-off that ushered the promptmonth lower in the afternoon. The September contract slipped 2.9cents to $3.03 after notching a $2.995 low.

A Houston risk manager was quick to point to crude oil futures,which tumbled almost a dollar lower Wednesday as a contributingfactor to the price erosion. “There were rumors out there that the[fund traders] were liquidating some of their positions in crudeand that prompted some nervous longs to do the same in natural,” hesaid. He went on to suggest that natural gas futures may have foundanother trading range similar to the $2.60-70 band that shackledthe market for seven days at the beginning of the month. “Themarket was able to make a $2.97 low [Tuesday] and a $3.13 high[Wednesday], but both days the market wasn’t able to sustain a moveoutside of the $3.00-10 area.” Looking ahead, he believes the realtest will come on a move to either $2.95 or $3.15. “I am a buyer at$3.15 and a seller at $2.95,” he said.

But just as concerns over a major storm jeopardizing Gulf Coastproduction were allaying Wednesday, the American Gas Association(AGA) laid a fresh log on the bulls’ fire. According to the AGA, 50Bcf was injected into underground storage facilities last week,bringing the total working gas in storage up to 2,452 Bcf, 163 Bcfless than last year, but still 90 Bcf more than the five-yearaverage. And while traders had been looking for an injection of50-60 Bcf, few believed the refill would fall short of last week’s51 Bcf.

Access trading reacted with its normal schizophrenic Wednesdayevening behavior by first spiking higher on the news, thenreversing to continue lower. At 6:30 p.m. last night, the Septembercontract had slipped an additional 4 cents to $2.99.

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