Feeding off late gains notched by the expiring April contractMonday, May kicked off its campaign as the spot month at Nymexyesterday by continuing higher in active trading. And whereas Aprilcontract made its mark in a late short squeeze, May was promptedhigher throughout the day by a steady stream of commercial andspeculative buying. Several sources also pointed to buy-stoporders, which were triggered as the market moved through the$1.93-95 range as a reason for the strength. May finished up 9.5cents at $1.978.

Looking back to the end of January, a Houston marketer said theFebruary contract’s strong finish, followed by March’s strong startand subsequent fall could be a blueprint for this market. “Marchblasted higher initially into the mid-$1.80s but then came off hardfor the rest of the month.”

He continued, saying that while the month of April will likelyexperience the same bearish weather as February, it will not sharethe same storage situation. “Most Northeast storage operators willrest their storage reservoirs for the next two or three weeksbefore the injection cycle. That will make gas plentiful for thefirst part of the month and somewhat harder to find for the secondhalf,” he reasoned. Based on that, he feels the May contract willcome under selling pressure until April 15-18, when demand for “thephysical molecule” kicks in to lift prices.

Another Gulf marketer agreed but took a different path downmemory lane. “After the March 1.666 expiration you couldn’t givegas away and people were calling for the market to sink to $1.50.But the weather finally kicked in and prices never saw that level.And now prices are strong and everyone seems short gas. I look forApril to give us a roller coaster ride full of both higher andlower prices.”

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