Trading at the New York Mercantile Exchange returned to “morenormal” levels Monday following last weeks GasMart/Power tradeshow, a phenomenon one broker said was reflected in the 4.8 centgain (to $2.215) the June contract posted yesterday. “Cash marketprices were up a dime or so on the weather, and futures traderstook notice,” he said. However, he noted the strength was notenough to forge a settle above major resistance at $2.26, which ledhim to believe “the technical trading range remains.”

Despite this short term observation, the broker feels technicalsmay soon escort June out at its trading range, and he predicts itwill do so to the upside. “Except for the weekly stochasticsindicator, all the charts look like like they’re ready to explodehigher. The same thing happened last year during the shouldermonths. Prices kind of just lingered around, but the strengthremained to the upside, and eventually price broke out in thatdirection,” he said.

For those who may counter that the current storage surplusversus last year (at377Bcf) may work against that move, a producersaid to consider the following : “production is also off last year,so is there really a surplus ? We’re showing short term excess, butlong term shortness. Which do you think is more influential onprices ? I’m betting on the latter,” he said.

If June is able to break above resistance in the $2.26-27 area,look for secondary resistance at $2.35, a technician said. Heplaces support for June at $2.11.

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