The July contract slipped ever-so-slightly yesterday during aquiet trading session as many traders elected to remain on thesidelines in anticipation of the AGA’s weekly storage report. Julywas limited to a tight nickel range settling down 0.8 cents to$1.93. Estimated volume was 47,000.

Following a string of nine bearish storage reports, Wednesday’sestimate showing a net injection of 86 Bcf gave bulls the firstgood news in some time. With expectations in the 90-110 Bcf rangeand last year’s refill totaling 91 Bcf yesterday’s report fellshort of both avoiding yet another week which would add to theoft-quoted year-on-year surplus. That surplus still stands at ahefty 461 Bcf, slipping from the 466 level of the past week. Thatled to some hopeful buying in last night’s Access trading sessionpushing July back up to $1.96 before selling left the contract at$1.950.

As is usually the case, opinion is strongly mixed as to thedirection of the market in the near-term. However, the PegasusEconometric Group of New York warns not to place too much stock inthe storage expectations. They argue, “whatever the result (of thestorage report), it will remain important, at least in theshort-term to trade on the price action rather than on the data.”To that end the group places resistance at $2.03, $2.07 and then at$2.20-235 to limit gains. They are looking for a downside objectiveat $1.91, with stronger buying clustered ahead of $1.80.

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