Wednesday afternoons have been interesting times lately in thenatural gas pit at Nymex and yesterday was no exception. Afterspiking as much as 20 cents higher on storage-hype-related buying,the June contract spiraled lower after the report was released. TheJuly contract finished at $4.356, just 0.2-cents above Tuesday’sclose. According to the American Gas Association, 56 Bcf wasinjected into underground storage facilities last week, bringingtotal working gas to 1,274 Bcf or 429 Bcf less than at the sametime last year.

Yesterday’s late-day sell-off came as a surprise to some marketwatchers, who expected the market to continue its practice ofrallying higher upon the release of fresh storage data. On the twoWednesday’s prior to this week’s, the market rallied an average of25 cents amid bullish storage reports. And while yesterday’s 56 Bcfinjection was slightly more than seen in either of those weeks, itfell notably short of the 71 Bcf refill of a year ago and the6-year average of 98 Bcf.

Looking at the larger picture, New York-based Pegasus iscautiously bearish. “July natural gas failed to staunch thebleeding at Wednesday’s $4.345 low for the day and now risks apullback to Monday’s low at $4.23, with follow-through past thatpoint seeking out failed resistance at $3.99-4.00. We wouldn’t lookfor much more than that on an initial flush from the highs,particularly without a bearish fundamental story to put heavierpressure on prices.”

July futures reached a low of $4.305 before climbing back up tounchanged in last night’s Access trading session.

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