Adding to gains achieved in the Monday evening Access tradingsession, the May contract continued higher yesterday morning asbulls confidently bolstered their long positions. However, recentgains notched by natural gas have not come without a fight andTuesday was no different. After topping out at $2.17, the promptmonth reversed direction in the afternoon, nearly erasing itsadvance by the close. May finished at $2.136, up 0.8 cents on theday.

Sources agreed stronger cash market prices and constructiveweather forecasts gave the market the reassurance it needed to tackon early gains yesterday. The National Weather Service six- to10-day forecast released Monday corroborated last Friday’sprediction by calling for below normal temperatures into theweekend for much of the upper Midwest, Ohio Valley, Mid Atlanticand Northeast. Henry Hub cash prices were up 8 cents Tuesday to$2.14.

Colder than normal temperatures, sources note, could also slowthe rate of storage injections in weeks to come, thereby furtherconstricting the year-on-year storage surplus. The American GasAssociation (AGA) estimates that surplus to be 278 Bcf.

But in the meantime the market will have to get past thisafternoon’s release of fresh storage data and the PegasusEconometric Group of New York is looking for the AGA to showanother small injection similar to last week’s 2 Bcf refill. Thegroup adds that only an injection of more than last year’s 22 Bcffigure would send a bearish message as it would serve to increasethe year-on-year surplus for the first time in almost a month.

In daily technicals Pegasus sees support for May at $2.08-09.Resistance resides at the top of the chart gap to $2.19, with $2.30and $2.45 looming as bullish goals over the intermediate term.

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