For the third day in a row Wednesday, natural gas futures werelower as traders continued to discount the arctic cold front andfocus on the larger fundamental picture. Even as a wintry mix ofprecipitation spread from Texas to Washington, D.C. yesterday,sources continued to point to the large storage overhang andforecasts calling for warming temperatures by early next week. Theprompt January contract finished 1.9 cents lower at $1.906.
A New Jersey analyst said the market ran out of steam todaypointing to the 16.8 cent loss January has suffered this week.”What we have seen is the market moving from post to post. Westarted the week near short-term resistance and have come all theway down to support [Wednesday].”
Whether January will remain above support clustered in the$1.88-90 area is yet to be seen, but some feel traders will waituntil next week to test the downside again. “The market couldexperience some short covering into the long holiday weekend.”Unless we get an extremely bearish storage report, I’d say supportshould hold until next Monday.”
But the gas storage news, released yesterday evening by theAmerican Gas Association, was not considered bearish. Featuring awithdrawal of 85 Bcf, the report was met mostly with ambivalence bytraders who were expecting a withdrawal in the 60-80 Bcf range. TheJanuary contract was 0.2 cents higher in last night’s Accesssession. The market will close at noon CST today.
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