Even an abbreviated pre-holiday trading session at the New YorkMercantile Exchange gave traders no rest last Friday as the marketclawed its way higher from a “disappointing” open only to reverseright back down at the close. When all the dust had settled and theorders were tabulated, the March contract was off 3.4 cents for theday at $2.633.

Heavy long liquidation following the release of reportsreconfirming the possibility of warm weather this week pressuredthe market to its lower open. But local traders stepped in shortlyafter 10:00 a.m. (EST) and were almost successful in influencingthe March contract back through unchanged on the day. However, oncethe rally failed, they too became sellers into the close.

Despite the sour finish, traders were quick to point out thatthe March contract closed up for the week. However, for Tom Saal ofMiami-based Pioneer Futures, last week’s trading range, which fellcompletely inside the week prior, could only be described asneutral. “On a weekly basis [March] put in an inside bar [last]week. Had it made a higher high or lower low then we might havesome direction, but this market feels very apprehensive headinginto expiration.”

With that being said, Saal turns his attention to the weatherfor insight into how March might spend its last week on the board.”Both private forecasters and the National Weather Service are inagreement on this one. It looks like we are going to see a prettybig warm-up. The market has come to expect seasonal readings andthat is how prices are trading at $2.60. Anything warmer thannormal and the market will lose some of its premium,” he said.

However, the Pegasus Econometric Group takes a more bullishslant and believes the weather outlook needs to be evaluated withrespect to recent years as opposed to a historical average ofnormal. “While the long-term weather outlook doesn’t appear torepresent any more of threat than the nearby conditions do, we notethat the standard for comparison as far as storage goes is the morerecent average that has been comprised of largely warmer thannormal winters.

“So even moderately above-normal temperatures may not yieldbearish comparisons. What the National Weather Service considersnormal, based on many years of data, and what the natural gasmarket considers normal may therefore, be two entirely differentthings,” the group wrote in its NatGas Report dated Feb. 18.

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.