After gapping up an impressive 2.5 cents at the open yesterday,natural gas futures chopped higher throughout the session astraders grappled with the potential of prices climbing even higherthis summer. The May contract reached its $3.15 high for the dayshortly after 2:30 P.M. (EST), only to tumble lower to settle at$3.137 amid a flurry of market-on-close selling. Estimated volumewas light with only 57,253 contracts changing hands.

Despite its tight 4-cent trading range Monday, Sandy Trot of NewYork-based Trot Trading Corp. was impressed by the market’sactivity. “We saw good buying at each level today from both fundsand commercial traders. When the ring would get a little long, itwould sell-off a penny or so. I think this thing is really beingfueled by concerns that there is not going to be enough physicalmolecules in the pipes this summer.”

Looking at technicals, Trot hones in on several levels ofresistance. $3.175 and $3.195 represent weekly continuation charthighs from last week and last October respectively, while themarket has not settled above the $3.13 level on a weekly basissince late 1997, he said. However, he feels the real test willlikely come before the May contract goes off the board Wednesday.”We are looking for some options-related futures buying [Tuesday]to help push May into the mid-$3.20s before expiration. In the longrun, we like this market higher – it just might be a rough roadalong the way,” he said.

Susannah Hardesty of Indiana-based Energy Research & Tradingechoes that sentiment and believes the market is in the process ofmaking its second peak of the Spring high between $3.15-20. Oncethat is complete (between now and May 12), Hardesty expects pricesto drop back into the $2.445-73 area before making another push forthe third and final Spring high. She calculates this high to comebetween May 29 and June 23 on a move up to $3.15-40 for the Julycontract.

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.