While winter does not officially conclude for another threeweeks, it was laid to rest yesterday in the gas pit at Nymex as theMarch contract filtered lower in a long liquidation sell-off duringits last hour of trading. The March contract expired at $4.998,down 13.3 cents on the session and more than $1.10 less than whereit was when it became prompt month back on Jan. 29.

Although not totally unexpected, yesterday’s price slideinitiated a round of debate as to which direction the market willtrend going forward. Bears yesterday were quick to point to theinability on the part of the March contract to hold, not only abovetrend line support at $5.10, but also above the psychologicallyimportant $5.00 level. Bulls on the other hand, maintained that inorder for the trend line to be broken, April has to settle beneathit. Coincidentally, the April contract finished right on top of theupward sloping trend line, which yesterday came in at $5.10.

As it turns out, the muddled technical picture was not the onlysource of friction for bulls and bears yesterday. Also a factor intraders’ decisions was the fundamental outlook featuring mostlybenign weather mixed with a potentially constructive storage figureto be released this Wednesday. According to Tim Evans of NewYork-based IFR Pegasus, a net withdrawal by the AGA of between 80and 100 Bcf will exceed last year’s 74 Bcf tally, serving to widenthe year-on-year deficit — currently at 308 Bcf — for the firsttime since the first week of January.

On the other side of the coin is weather, which according to theNational Weather Service should be seasonal heading into the firstweek of March. In the latest six- to 10-day forecast, the NWS callsfor below-normal temperatures in the Southeast to be offset byabove-normal temperatures in the Southwest. The rest of thecountry, meanwhile, can expect normal mercury readings.

©Copyright 2001 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.