Expiration days are known for their unusualness, but perhaps noother day in the history of the New York Mercantile Exchange willmatch the one turned in yesterday. The last few days of trading hadbeen relatively tame, but a telephone glitch that knocked outcommunications on the floor of the Exchange (see “Phone Lines Dead; Nymex TradingDisrupted”) at approximately 1:50 EST forced many traders intotrading at prices and volumes “that they otherwise would not havedone,” a source told GPI. As a result of the madness, the Marchcontract finally left the board at $2.286, up an even 7.0 cents forthe day.
The April contract naturally followed March higher, and manysources surveyed by GPI wondered whether the new spot contract canremain above $2.30. Most of them believe it can. “Say what you wantabout warmer temperatures, the fact remains that production in 1997was noticeably less than it was in 1996. That means this lowerdemand is being met with lower supply. April is a shoulder month,and already prices for that month are surpassing those seen inJanuary and February. Obviously, the supply situation is a majorconcern,” an analyst said.
One trader said it will be interesting to see how people reactto the latest AGA storage report. At 77 Bcf worth of withdrawals,the report is slightly lower than the 63 Bcf turned in during thesame period last year. On the other hand, the Pegasus EconometricsGroup of New York calculated that 150 Bcf worth of withdrawals ismore typical for this time of year. “Of course, after what happenedat Nymex yesterday, nothing else could have much of an impact. Youobviously had people trade positions at prices they otherwise wouldnot have. They may be looking for payback of some sort today, nomatter what the fundamental picture,” he said.
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