Buoyed by gains achieved in the overnight Access tradingsession, natural gas futures finished on a positive note Friday, asshort covering took back a small percentage of last week’s massivelosses. The February contract led the way, rumbling 32.3 centshigher to close at $7.459. Meanwhile, the out months were muchquieter with smaller gains in March, April and May almost offsetby modest losses in the rest of the strip.

For an analyst to several key local traders, Ira Hochman, themarket’s inability to trade for any duration above his key momentumnumber at $7.61 was a telltale sign that the market had reached itsupside potential early Friday. February futures were fast out ofthe chute and notched a $7.62 high on the day at about 9:45 a.m.(ET). On the downside, Hochman sees sturdy support at the $6.80Fibonacci level, which represents a 50% retracement between theNovember $3.68 low and recent highs.

For Susannah Hardesty of Indiana-based Energy Research andTrading, a combination of warm weather forecasts, low storagewithdrawals and decreased physical demand should lead the market tolower prices. Specifically, she looks for at least two winter lows,which will allow for buying opportunities. The first or A1 low willoccur before Feb. 16 on a move by the March contract to the$5.00-6.00 level. The second or A2 low, she continued, will occurbetween mid-February and mid-March on a move down to the$4.30-$5.75 area.

Effective Friday, Nymex lowered the margins to $12,000 forclearing members, to $13,200 for members, and to $16,200 forcustomers for both the February and March contracts. At the sametime, Nymex raised margins to $6,000 for clearing members, to$6,600 for members, and to $8,100 for customers for the Aprilcontract.

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