“It was like a bad dream,” was one marketer’s summation ofWednesday’s 4-cent decline that was quickly recouped by yesterday’s4.1-cent advance. Another trader was a little more specific,attributing the downward blip to funds rolling positions from Mayto June. But regardless of the rationale, Wednesday’s lowersettle-the first one in the last seven sessions-looked like theGrand Canyon nestled among the Alps.
Things got back on track Thursday, as funds and locals continuedto add to their long positions. The May contract finished up 4.1cents to $2.137 in relatively light trading.
However, a Chicago trader is not convinced May has seen thelast of sub-$2.10 prices and feels there could be some more sellingpressure today. “[May] has flirted with the $2.17 level three timesand not broken through it. I think that the market needs time toregroup and I look for the market to trend lower [Friday], possiblytesting Wednesday’s low of $2.075,” he speculated
However in the long term, he remains bullish for both technicaland fundamental reasons. “This market has just completed thetransitional phase from storage withdrawals to injections. Thatmeans the market dynamics have changed and there is strong economicincentive for people to buy gas for injections while locking in awinter price.” And do not underestimate the power of technicalfactors, which he feels have garnered the attention ofnon-commercial “fund” buyers. “They are building their longpositions and it’s not a wise move to bet against them because theyhave more money than God,” he half-joked.
A Houston marketer took a slightly different slant. “I look forearly strength relative to cash [Friday], followed by a decay inthe afternoon spurred by light book-squaring ahead of the weekend.”He predicts May will finish in the $2.11-12 area ahead of theweekend.
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