After rebounding 5% during Friday’s short-covering rally, bullsat Nymex cooled their heels yesterday as traders pressured thecontract lower on moderating weather forecasts and a less bullishtechnical outlook. At the close, the prompt August contract was off3.4 cents at $4.228.

For many traders, Monday’s quiet, range-bound trading sessiondid not come as a surprise. In fact, several traders felt it was aday late as they had expected the market to exhibit that same calmlast Friday.

Even stronger cash prices, which rumbled 20 cents higheryesterday morning in an attempt to keep pace with Friday’s Nymexgains, were not enough to boost futures. But those gains could bein jeopardy as key areas where gas is used to fire electricgenerating facilities could receive a much-needed cool-off.

According to the latest six- to 10-day forecast released Mondayby the National Weather Service, West Texas along with theSoutheast will see below-normal temperatures while the North andWest is expected to have hotter- than- usual weather.

With little compelling news on the fundamental front, manytraders turned their attention to the market’s prospects from atechnical standpoint. Although not as bullish as she has been overthe past couple weeks, Cynthia Kase of New Mexico-base Kase andAssociates remains optimistic on prices. Kase believes that despitethe market’s inability to hold the $4.01 level on an intra-daybasis last week, it was constructive that that level was notbreached on a closing basis.

“That support held and the market rebounded causes us to remainoptimistic,” the group wrote in GasFax dated July 7. “Odds favorthe market continuing up from its current $4.31 high, holding thelows along the way and likely holding the $4.10s.” However, whilenot jeopardizing the up-trend, last week’s correction mayultimately limit the market’s upside. “What is compromised is theextent to which the market may move higher. It is still likely forAugust to meet or exceed, to come degree, its previous $4.667 highbut the chances of going much higher in the very short run withoutthe influence of a new random event helping it along, ismoderated.”

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