The futures market received an early boost from hot weatherspreading up the East coast and a strong over-the-counter marketMonday morning, but the buying ebbed sending Nymex spiraling lowerthroughout the day. “We shot up to $2.20 in a hurry, but the marketcould offer no follow-through above that level. At that point itwas a where-do-we-go-from-here mentality and the answer to thatquestion was down,” an analyst said. That left the August contractoff 7 cents to $2.095.
Henry Hub cash prices were immune to the weakness, posting asmall gain to average in the high teens on the day. “The mostconspicuous thing in the market today was the sizable discrepancybetween cash and futures prices. Now the question becomes whichwill move to make up the difference? If this was a month ago I’dsay the futures might be the one to move higher, but here in Julycash has been a slave to the screen and based on that I look forthe Hub come out bid-ask at [$2.10 and $2.14] on Tuesday,” amarketer said.
Another source noted, although the forecast does call fortemperatures in the mid to high 90s by midweek for much of theeastern seaboard, the above normal temperatures will be short-livedwith rain and a cooling trend into the weekend.
A Houston trader is already anticipating “the market’s weeklybear pill” in the form of the AGA storage report releasedWednesday. He expects another relatively large injection that willnot “buoy the technical deterioration the market is experiencing.”Early predictions for the report range in the 70-90 Bcf range.
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