Fresh off a neat, 13-cent gain Monday, the futures marketrumbled higher yesterday as fundamental traders braced for asizable storage withdrawal today and technicians set their sightson resistance levels from late last year.
With that confluence of bullish factors, the March contractchecked higher to notch an impressive $2.745 high, only to have itsadvances trimmed at the closing bell. The March contract finishedup 3.7 cents at $2.699 for the session, just short of keyresistance from Dec. 20, 1999 at $2.715.
A Chicago trader found it hard to believe prices are almost adollar above year-ago levels. “Even if we get the large withdrawaleveryone is calling for, it will still only put us 200 Bcf belowlast year’s record levels. And this weather cannot keep up forever.Temperatures [in Chicago] are expected to warm into the 40s and 50sby the weekend. If that happens we will lose a couple Bcfs ofdemand [in the physical market],” he said. Last year at this timethe market pulled only 78 Bcf from storage.
However, a Houston trader was less concerned with fundamentalsand more focused on key technical resistance at $2.715. “If we cansettle above [$2.715], this market has the potential to travel allthe way to $3. I’m not saying it won’t be a return trip, but thereis very little to stop it once it breaks,” he said.
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