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June Futures Hold to Their Mid-Range
Amid a day one broker called “perhaps the most boring of any Iremember,” the spot June NYMEX contract nudged 0.4 cents lower tosettle at $2.200. The broker actually said the day was interestingin that a large amount of anticipated activity never materialized.”Every floor trader we spoke to expected when June broke below$2.18, tons of sell stops would kick in between $2.15-17. But therewasn’t diddly squat for stops. In fact, just the opposite happenedin that there was pretty good scaled-down buying once June hit$2.15,” he said.
One analyst believes Thursday’s rally from its $2.15 lowunderlines the inherent strength in this market. “Cash prices areholding at $2.19 with no weather, so that should tell you there isvirtually no downside to this market. It’s supposed to be hotter inthe Midwest and the Southwest next week, but I don’t think thatwill have much effect on prices. Once temperatures in Texas break95 degrees, gas use there tends to go up geometrically, but itdoesn’t look like that will happen.
“Several marketers remain extremely long for May, and sincetemperatures don’t look like they will rise to breakneck levels, Idoubt the cash market will rise above first-of-the-month indices.That means the cash market shouldn’t rise above $2.26-27 in theGulf which is exactly where June (futures) resistance lies. Barringan extraordinary fundamental development, I think this contract isdoomed to trade within its range of $2.11-27 for the next two weeksuntil expiration,” he predicted.
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