The futures market was able to sustain another day of weakercash prices Friday to trade on either side of unchanged on the day.A late rally on weak volume after many traders in New York andHouston had called it a week was the market’s only excitement forthe day and provided the November contract with a 1.4-cent boostgoing into the weekend to settle at $2.109.

The Pegasus Econometric Group of New York thinks the market isslowly building a case for higher prices with each meager AGAstorage refill figure. “The low rate of refills took the seventhconsecutive bite out of the year on year surplus and now makes itunlikely storage will reach the 3 Tcf benchmark,” the group wrotein the Natural Gas Report dated October 16. Addtionally they pointto the new National Weather Service 90-day forecast calling forcolder than normal weather for the north central US as aconstructive factor.

Susannah Hardesty of Energy Research and Trading in Greencastle,IN. agrees, noting the downside correction has been made. Althoughthe move plumbed slightly below her predicted range, she now looksfor the market to chop sideways until the November contract canproduce a settle above the pivotal $2.18 level. This may happen asearly as the week in response to a short term cold front migratingacross the U.S., she said.

However, a California marketer who was bullish for the entiremonth of September, now is concerned trading last week could bejust a set-up to lure new bulls into the market for slaughter. “Themarket is still in a very precarious position, and could test the$2.00 level again. I have not been a buyer all week and willprobably remain on the sidelines until the market can settle above$2.20. That would firmly establish the $2.03 level reached thisweek as a floor from which the market could build.”

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