After testing, but not breaching stubborn resistance at $4.60Thursday, natural gas futures tumbled lower Friday as traderselected to take profits ahead of the weekend. The near-month Julycontract was hit with two distinct selling waves during the firsthour of trading Friday, setting the tone for a session in which thecontract slipped 10.3 cents to finish at $4.448.

With little in the way of fresh fundamental news on which to goFriday, traders were already looking ahead to the busy schedulethis week. Fresh weather forecasts will likely take center stageMonday, followed by the expiration of options Tuesday. Then, inwhat could produce a display of fireworks at Nymex, fresh storagedata will be released about an hour before the July contractexpires on Wednesday.

“Volatility” is the one-word description Tim Evans of NewYork-based Pegasus Econometric Group chooses to predict the marketafter looking ahead at this week’s calendar. “We could be in foranother traditional whip-saw [this week]. If the weather turns outto be as benign as forecast, [prices] could see some additionalsoftening Monday, followed by a bounce mid-week,” he reasoned.

Looking ahead, he predicts the American Gas Association willshow an 80 Bcf injection in their Wednesday afternoon report.However, even more difficult than estimating the size of the refillfor Evans, is to attempt to anticipate the market’s reaction.”There is no doubt [an 80 Bcf injection] will be bullish ineconomic terms as it will fall short of last year’s 91 Bcf mark.However, a refill of 80 Bcf would be the largest yet this seasonand that could entice some sellers,” he said.

While Evans predicts an 11 Bcf addition to the year-on-yeardeficit this week, Deutsche Banc Alex. Brown takes a look a littledeeper into the injection cycle. “Although current inventories arein the 1994-98 average range, low injections look bound to takestorage below the normal level by September, assuming injectionsrise 1 Bcf/d less than the historical summer rate. By the end ofSeptember, inventories look likely to range around 2,420 Bcf, or400 Bcf below last year at the same time and 300 Bcf below thefive-year average through 1998.” Currently, storage stands at 1,494Bcf versus 1,942 a year ago, according to the AGA.

Although temperatures are expected to start the week on the coolside, the six- to 10-day forecast released Friday by the NationalWeather Service has a little something for everyone. The Northwest,Northeast, and the Great Lakes region are slated for below-averagetemperatures, better for bears’ hibernation. Southern Californiaand a large swath of the South Central U.S. will likely feel theburn of above-average temperatures, which could keep bulls running.Middle America, from the West Coast to the East Coast, is predictedto see normal mercury readings.

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