The May Nymex contract surged 13.3 cents to $2.668 Wednesday,despite cash market prices which remained relatively unchanged. Thereason why? “Who really knows, but what I do know enough funds wereconvinced this market was a play to trigger buy stops above $2.61.Estimated volume of more than 80,000 contracts tells you that,” asource told GPI.
Part of the excitement may have come in anticipation of the AGAstorage report, which at 7 Bcf of withdrawals is considered bullishby an industry analyst. “The market was expecting anywhere from a20 Bcf withdrawal to a 20 Bcf injection. But realistically, anywithdrawal figure would have been considered bullish, so 7 Bcf issafely within that band,” he said.
The analyst also noted May settled near the top of its dailytrading range, and for that reason, he expects follow throughbuying today, “especially if cash market prices are strong (this)morning, as they are likely to be.” If May does move higher, lookfor an upward target of $2.80, he said. Otherwise, he expectssupport to kick in at yesterday’s failed $2.605 support level.
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