Just as Tropical Storm Bret was being downgraded to a drenchingrain event for South Texas the natural gas futures market wasundergoing a downgrading of its own yesterday, as traders tookprofits in a mid-morning sell-off. However, by mid-afternoon theNational Hurricane Center had anointed the latest two tropicaldepressions-Dennis and Emily-into tropical storms and that wasenough to convince those sellers to become buyers. That was almostenough to recoup the earlier price decline, leaving the Septembercontract to finish the session with only a half-cent loss to$3.059.

With Tropical Storms Cindy and Emily still located in theCentral Atlantic Ocean, only Tropical Storm Dennis, located 125miles north of Turks Island in the Caribbean, posed an immediatethreat to land. And although it remains to be seen whether any ofthe storms have a shot at affecting physical supply, Tom Saal ofMiami-based Pioneer Futures believes they have already had animpact on the futures market. “Locals were big sellers after thelower open today. They took the market lower searching for the nextlevel of buying. As soon as Dennis became a tropical storm they gottheir buying. Then they too became buyers on the move up.”

Looking ahead, Saal expects more of the same bullishness andfeels the market could be setting itself up for a big move higher.”In the near-term we are susceptible to small moves lower as thestorms come and go. But if we pullback into the $2.70-80 level andhold, look out, because the next move higher could be significant,”he reasoned.

The American Gas Association could add another slant to thebullish news when it releases weekly storage data today.Expectations are centered on a net injection of 50-60 Bcf, whichwould fall in line with last week’s 51 Bcf refill, but short oflast year’s 71 Bcf figure. Saal is looking injections of 57 Bcf.

©Copyright 1999 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.