What a difference a week can make. After watching helplessly asprices plumbed fresh two and a half months lows last Wednesday,bulls at Nymex were back at the helm yesterday and with the help ofa neutral to slightly bullish storage report were successfuldriving prices up 5.7%. The prompt month experienced it secondstraight advance of more than 20-cents, bubbling 22.7 cents higherto finish at $4.214.

As is usually the case on Wednesday, the market was eagerlyawaiting the release of fresh storage data from the American GasAssociation. Because that report can have such an impact on thefutures market, traders have made a weekly ritual out of trying topredict the withdrawal or injection figure. This week those marketpredictions were centered on an injection of 65 to 73 Bcf.

Although not too far from that range of expectations, the 63 Bcffigure released by the AGA was greeted with strong bullish euphoriayesterday. Storage is now 58% full at 1,920 Bcf, which is still 386Bcf less than year ago levels, and 177 less than the 5-yearaverage.

Although his area of the country was actually responsible for anet 2 Bcf withdrawal, a California marketer was surprised by themeager 63 Bcf injection. “Economically, there was a huge incentiveto put gas into the ground last week. Prices were low. The spreadswere there, and the aside from California, the weather was mild.”

Looking ahead, the Tim Evans, of New York-based Pegasus Group iscautious following the storage-induced price spike. “The marketclimbed to new highs following the news, suggesting the theory thatthe storage data represents the last of the bearish news and thatit’s going to be clear and bullish sailing from here to the heatingseason. We’re not quite so sure, as the comparison refill for nextweek’s report was a relatively modest 45 Bcf, which was still arelatively low level. At some stage we also thing the market mightbegin to acknowledge that there is no current storm threat in theGulf of Mexico.

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