After three consecutive days marked by the bullish pattern ofhigher highs and higher lows, the futures market receded yesterdayon a wave of selling pressure by both commercial and local traders.June wilted into its daily close, tumbling 8.1 cents lower tofinish at $2.262.
Ed Kennedy of Miami-based Pioneer futures said the market’sdirection was decided early yesterday when bull traders were unableto push above the $2.31 opening price. As it turned out, $2.31 wasthe high for the session as sellers took control shortly after theopening bell. “A large commercial trader came out as a big seller,and once the market started to move lower locals got religion in ahurry,” Kennedy added.
However if the contract is to continue lower, it will have toovercome scale-down buying, which he feels is waiting in the$2.19-20 area. “Industrials were buyers last time the contractdipped down there, and there’s nothing to indicate they won’t bebuyers again,” he said.
A Houston marketer was surprised by the market’s ability toretrace recent gains on the heels of the latest National WeatherService 6- to 10-day forecast, which calls for above-normaltemperatures for most of the country. But according to Fred Gesserof Omaha-based Strategic Weather Services, traders should preparefor warmer weather. In his most recent 30-day forecast, which isconsistent with cooler-than-usual waters in the eastern PacificOcean, Gesser predicts normal temperatures from Northern NewEngland down the coast and including the Mid-Atlantic states.However, in most other gas-sensitive areas, which include the GreatPlains states across into the western Mississippi Valley and theSoutheast, he expects to see above-normal mercury readings.
Looking ahead to the American Gas Association Storage report tobe released this afternoon, market watchers are doing their ownforecasting. The Pegasus Econometric Group of New York looks for a70 to 90 Bcf refill. Ed Kennedy estimates 82 Bcf will be injected.Last year, the market saw a 92 Bcf build for the week.
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