The futures market gave back some ground early in the dayFriday, but then managed to rebound late to trade to either side ofunchanged for the day. That enabled the December contract to settlefor the second day in a row at $2.553. Estimated volume was amoderate 47,537.

Now the question becomes whether the market can hold, and evenbuild on last week’s gains. A marketer said heating demand couldcontinue to bolster both cash and futures prices this week. Toolate to influence trading Friday, the National Weather Servicereleased its latest 6- to 10-day forecast which calls formuch-below normal temperatures for most of the upper-Midwest, GreatLakes region, and Northern and Central Plains. Below normaltemperatures are expected for the rest of the country except forthe Southeast where above-normal readings are predicted.

The Pegasus Econometric Group of New York thinks the weathercard has been overdone and “the gains were out of proportion withthe actual temperatures” last week. They doubt December can clearresistance in the $2.72-area without either consolidation orsomething more substantial fundamentally behind the move.

However, Susannah Hardesty of Energy Research and Trading inGreencastle, IN. admits there could be additional downsidecorrections in the next week or two, but the continued move shouldbe higher, with December peaking from $2.80-$3.10 by expiration.

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