After pushing prices some 60 cents higher over the past threeweeks, traders were faced with one question when they came backinto work following the holiday weekend: When will October futuresbreach the $5.00 level?

It didn’t take long for them to receive an answer.

Fueled by waves of fund and commercial buying, natural gasfutures shot higher yesterday amid continued concerns that suppliesthis winter will not be enough to keep pace with demand. Afterposting an impressive 11.5-cent gain to close at $4.95 in theregular open-outcry session, October futures became the firstprompt contract to crest the $5.00 level by advancing an additional5.5 cents in last night’s Access trading session. Meanwhile thegains in the out months were equally impressive as the winter stripclawed 12.5 cents higher to $4.884.

While record-setting temperatures in the state of Texas and heavyactivity in the tropics (see relatedstory) continue to paint a supportive weather picture for naturalgas prices, it was the likelihood that the market will see anotherbullish storage report today that sent prices higher yesterday,traders agreed.

Most preliminary expectations are focused on a 45 to 55 Bcfinjection which would fall in line with last week’s 52 Bcf refill.However, if realized, an injection of that magnitude would falldramatically short of last year’s 66 Bcf addition and the five-yearaverage build of 74 Bcf, serving to widen the deficit to historicallevels. According to the American Gas Association, the marketcurrently has 377 Bcf less gas in the ground now than it did a yearago and 209 Bcf less than it has averaged at this time during thelast five years.

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