Futures came under heavy selling pressure early in the dayMonday, and the market never looked back as traders began discountto the threat of Hurricane Georges causing a major impact to gasproduction. “There was only one certainty you could bank on cominginto the market [Monday] morning. Momentum-whichever way the marketmoved at the open would dictate the direction for the rest of thetrading session,” a New York broker said. The October contract wasdealt the largest losses, slipping 15 cents to limp off the boardat $2.031.

Although the short-term supply disruptions appear to besubstantial from Georges, a Houston-based marketer felt Monday’sprice action was little more than the market equilibrating itself.”There was a 10-20 cent storm premium embedded into the market alllast week on the threat of supply disruptions. What we saw [Monday]was the market taking back that premium.”

Looking ahead, a Gulf Coast trader looks for technicals totakeover until the nebulous supply situation can work itself out.”This market may be free to probe to the upside again now thatOctober is off the board. Fundamentals are definitely still bearishbut are in the background until the market finds out just how muchgas is out there, which probably won’t happen for a week or so.”

However, Tom Saal of Miami-based Pioneer Futures takes a moreconservative tack pointing to the latest CFTC Commitment of Tradersreport released last Friday. That report showed non-commercialtraders had lightened their short positions considerably andactually were net long 2,940 positions as of Sept. 22. “That leavesthe market in a state of limbo. [Non-commercials] could easily golong or short from here. They have tried the short side so now theymight be more inclined to go long. But, November has slipped towithin striking distance of the important 40-day moving average at$2.19. That could entice selling as speculators look to push themarket below that level,” he reasoned.

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