In what has become almost routine lately, the AGA’s report ofstrong injections into storage caused a wave of follow-throughselling Thursday. A lower open allowed the contract to slip beneathsupport to settle at $2.02. In doing so, the July contract fell anadditional 8.6 cents to settle at the contract’s lowest point since1997.

“Fundamentally the outlook couldn’t be much worse,” said oneanalyst. “106 [Bcf] is an extremely large number. That sounds morelike a January withdrawal figure than it does late May injectionnumber.” The 106 Bcf refill is the largest since July of 1995 whena 115 Bcf injection brought the August contract tumbling down to afinal expiration at $1.385.

However, a Tulsa-based trader feels as if we have weathered thestorm and that weather, not storage will dictate this market’sdirection in the coming months. “This week’s large refill is notmuch different then last week’s. In fact this week’s injection,although large in absolute terms, was not as big when compared withlast year. What is different this week is the weather forecast.Last week, the mercury was rising for the weekend, this weekend[it] is calling for temps to be about 20 degrees cooler.” Hecontinued by pointing out no amount of gas in the ground will helpif this summer’s temperatures turn out like forecasts predict.

Since July has taken out prior support at $2.03-035, the spotlow from the continuation chart at $1.97-98 now stands as support.Resistance now exists at the aforementioned $2.03-035 level

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