Spurred by constructive over-the-counter dealings, along with alittle apprehension ahead of today’s release of fresh storage data,the July contract gapped higher at the open yesterday en route toan unprecedented 15th advance in 16 trading sessions. After makinga “head fake” lower about mid-morning Tuesday, the July contractrumbled 8.6 cents higher to finish at $4.354.
“We have moved lower each of the last three months when a newprompt month is introduced,” a Chicago marketer observed. “But eachtime, the market battles back and moves higher,” he said. Both Mayand June contracts experienced 3.5-cent losses on their first dayas the spot contract at Nymex and for a while yesterday it lookedas if July might fare even worse on its first day in the spotlight.However, sellers were unsuccessful taking July below Friday’s $4.22low, and that gave bargain-hunting buyers the chance they werewaiting for to bid prices higher.
Another factor that undoubtedly played into traders’ decisionyesterday was the weekly storage report to be released thisafternoon by the American Gas Association. If true to form, thatreport will feature a relatively low injection versus last year andthe 6-year average, which will likely give traders anotheropportunity to take prices higher. The June contract was propelled63.4 cents higher cumulatively over the last three Wednesdays afterthe storage report was released. Preliminary expectations for thatreport are centered on a 30-70 Bcf injection, which if realized,will fall short of last year’s 71 Bcf refill and the 6-year averageof 98 Bcf.
In yesterday afternoon Access trading the market continuedhigher, posting a 7.6-cent gain to finish at $4.43.
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