Following three straight days of gains, bull traders had theirwinning streak cut late Monday after trading in positive territoryfor much of the session. And although many sources were expecting apullback following the near 20-cent price spike last week, somefelt the prompt contract’s inability to make a new high was anegative feature. The May contract finished down 0.8 cents at$2.03.
“Locals were active but not dominant yesterday,” was one gulftrader’s explanation for the heavy buying and subsequent sell-offMonday. “It took some extreme length on the part of locals just tosustain the level in the upper $2.00s. But, once they realized theycouldn’t push the market through resistance, they were forced todump their positions,” he continued
And since speculators have been unsuccessful in their attemptsto promote a settlement above $2.09, another market watcher feelsthe next push will have to come from the cash market. “It isunclear whether [Henry Hub] cash prices will open up this morningabove or below $2.00. Prices above $2.00 would be a show of supportfor Nymex, but a “one” in front of the decimal point would be anegative price development. While he favors the latter scenario, headmits that April has not seen the last of $2.00 prices. “The nextseven trading days we could see lower prices because Ohio Valleyand Northeast storage operators will continue to sell a largeportion of their baseload gas in the spot market. But once theirstorage facilities are ready, it will feel like spot poolconstrictions as they pull those supplies off the market in favorof injecting it into the ground.”
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