With little in the way of technical or fundamental news, naturalgas futures were held to an extremely-tight, 4-cent range in quiettrade yesterday. By finishing at $2.949, the May contract was just0.1 cents below its opening price and 2.2 cents lower for the day.Estimated volume was thin, with only 31,720 contracts changinghands.
“We are in a huge pivot area,” said one trader. “Both bull andbear claimed victory based on what the other one was unable to do.Bears couldn’t fill in the $2.90-92 chart gap, while bulls couldn’teven retest key psychological resistance at $3.00,” he said.
The key thing that needs to be sorted out if prices are to beable to move above resistance is who are going to be the buyers.While a couple sources have pointed to producers as the catalystsfor the plus-$3.00 prints Friday and Monday, the general consensusis that locals were responsible. “They were gunning for [buy] stopsand didn’t get any,” said one risk manager.
A supportive feature yesterday was cash prices, which althoughslipping from the day before, still traded at a premium to theprompt month futures contract. Henry Hub cash for tomorrow averaged$2.98, down a penny.
As usual, the weekly release of fresh storage news today willgarner much attention. Estimates range from a 10 Bcf net draw to asmuch as a 7 Bcf net injection. A year ago the market saw a 30 Bcfinjection, while the six-year average is a 10 Bcf build.
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