For the second day in a row the futures market probed to eitherside of unchanged yesterday as local traders attempted to influencethe market-first higher, then lower-in choppy, range-bound trading.But for the second day in a row they received little or no helpfrom other market participants, and thus were forced to cover intheir positions before the close. That enabled the October contractto drift quietly lower Monday, closing down 2 cents to $2.781.Estimated volume of 74,785 was well below Friday’s impressive114,000 figure.

“Like a deer frozen in the headlights” was one broker’sdescription of traders who appeared reluctant to push the marketvery far in either direction Monday. And with a dangerous hurricanebearing down on Florida, they weren’t the only ones for which thatsimile seemed apt.

Floyd was upgraded to a class IV hurricane yesterday, packingmaximum sustained winds of 155 mph with tropical storm force winds(39 mph and greater) extending outward up to 290 miles from center.Although current forecasts call for the storm to make a gradualturn to the North today, traders with their eye on productionassets in the Gulf of Mexico aren’t taking any chances. “All fourcomputer models have called for this thing to have already turnedtoward the North and so far they have all been wrong,” said EdKennedy of Miami-based Pioneer Futures. If it does not start tocurve soon, both the Gulf of Mexico and prior highs of $3.15 are injeopardy, he continued.

However, Susannah Hardesty of Indiana-based Energy Research& Trading remains unflinchingly bearish for both fundamentaland technical reasons and feels right now is a low-risk sellingopportunity. Based on the waning hurricane threat, a large storagerefill, and sell signals on daily moving averages and stochastics,she believes prices will continue lower this week.

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