Changes were in the air last Wednesday at the New YorkMercantile Exchange. Traders were greeted with a new promptmonth-January, a stronger December cash market, and even a freshrally-thanks to a short-covering Tuesday. Just about the only thingthat hadn’t changed were the bearish fundamental factors-storageand weather-prevalent in the market. But once again thosefundamentals were king Wednesday, and the selling pushed theJanuary contract down 7.9 cents to $2.196 at the closing bell.
Sources agreed that Wednesday’s price movement was a knee-jerkreaction to the gains posted on Tuesday. “There was no fundamentalbasis for the rally [Tuesday], just some shorts hoping for a repeatof November’s settlement. When it became apparent that Decemberwasn’t going to spiral lower into expiration, they covered,” aDallas marketer said. The November contract plummeted 13.6 cents onits last trading day.
Susannah Hardesty of Energy Research and Trading of Greencastle,IN acknowledges the January market is very weak, but warns thatthere were some significant intra-day buy signals generatedTuesday. “However, this market still needs a boost from colderweather in order to gain some upside momentum.”
That may have to wait another week, because the National WeatherService (NWS) released its latest 6- to 10-day forecast Wednesdayevening which extended the outlook for above- and much-above normaltemperatures through Dec. 5. Only Florida and New England canexpect seasonal readings, the NWS said.
And if that wasn’t enough, the American Gas Association weighedin with another bearish pill. Released too late to affect trading, AGA’s weekly storage data showed a 13 Bcf withdrawal, much lessthan nearly all expectations and far below the 108 Bcf figure froma year ago.
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