The futures market was pressured lower Tuesday as sellers sentthe February contract tumbling back down to support clustered inthe $1.73-74 area. But once again the move failed to produce a newcontract low, which set off a short-covering rally that bid theprompt month higher just prior to the close. February settled at$1.817, a fraction of a penny off its high for the day and 2.1cents higher than last week’s closing price.

Some traders were surprised by yesterday’s late strength, but aHouston-based marketer said there is a good deal of buying intereston a move below $1.75. “The futures market has found a comfort zonebetween $1.75 and $2.25. There are buyers wanting to own thecontract near the bottom of that range, and sellers ready to shortthe market at the top.”

But for many market watchers the market the $2.25 level is adistant memory because spot Nymex prices have not touched thatlevel since late November. Susannah Hardesty of Energy Research& Trading, Inc. of Greencastle, IN. has not given up hope. “Itis still likely for a significant upward move in the next [30 to 45days]. Weather patterns for the remainder of January and early tomid February, along with speculative trading funds, hold the key,”said Hardesty in her Jan. 14 Natural Gas Weekly Report. Althoughshe doesn’t think the rally will come in time to aid the Februarycontract, she does expect February to trend higher, possiblyexpiring in the $1.825-$2.000 area.

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