Despite a round of midday profit taking, the natural gas futuresmarket was able to eke out a modest advance amid continued see-sawtrading activity yesterday. The September contract led all othermonths, posting a 1.9-cent gain en route to a $2.727 close.Estimated volume was robust with 86,261 contracts changing hands.

With little in the way of fresh news Thursday, traders hadplenty of time to dissect the weekly storage figures releasedWednesday. According to the American Gas Association, 45 Bcf wasinjected into underground storage facilities last week bringingworking gas levels to 2,351 Bcf, or 117 Bcf more than a year ago. AGulf trader was surprised by the scant 8 Bcf injection in theWestern consuming region. “Weather has remained very mild out West.They should be stuffing gas into every nook and cranny.”

Technically, the market remains bullish despite the break belowtrendline support, which is an upward sloping line drawn byconnecting the lows on a daily bar chart over the past severalweeks. “Violation of the steep uptrend support now looks like abear trap, just feeding the bulls more ammunition for squeezing themarket back to the upside,” said Tim Evans of New York-basedThompson Global Markets. “Success above $2.80 should clear a pathto the $2.90-92 level where we see the next tranche of selling.”

But in order for the market to trend higher it will first needto get past some potentially bearish news this afternoon when theCommodity Futures Trading Commission releases its bi-weeklyCommitment of Traders report. Some argue that based on advancesexperienced by the market over the last two weeks the CFTC willshow that non-commercial traders have pushed their long positionsto historical highs. As of July 27, 1999 non-commercials were netlong more than 34,000 in open interest.

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