The futures market wasted little time continuing lower yesterdayadding to losses registered Wednesday evening following the releaseof the weekly AGA storage report. That report, showing alarger-than-expected 93 Bcf injection gave storage bears somethingto chew on. The August contract opened near its high then tumbled9.9 cents to settle at $2.132 in active trading yesterday.
Looking to today’s market, a Houston basis trader is notconvinced the August contract will continue to trend lower today.”The real question out there that needs to be answered in order forthis market to continue to go lower is who will be the new sellersnow that most of the longs have already been stopped out.” Tom Saalof Pioneer Futures in Miami agrees, adding he predicts thespeculators are flat right now. “The fund groups haven’t really hitthis market yet so they could go long or short from here. However,there is enough physical supply around to create anxiety on thepart of buyers in the near-term.”
Another source feels cash prices tomorrow morning may hold theanswer. He theorizes cash buyers could step in to inject some lifeinto the market. Typically in a market that puts together a stringof loses in a week, everyone comes into the office expecting pricesto continue down on Friday, then the market surprises them byrebounding higher. This could be one of those Fridays.” Hecontinued saying there was fresh buying at the Henry Hub Thursdayfrom a marketer that had been a seller for the first half of themonth. “They have been selling storage gas at an average price of$2.32 for the first 15 days of the month. Now they have the abilityto buy at $2.15 essentially pocketing a 17 cent profit.”
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