Boosted by a more than a nickel increase in during the overnightAccess trading session, followed by a second straight day of higherearly morning over-the-counter dealings, natural gas futures werequick out of the chute Tuesday as traders set their sights onceagain on the key $4.00 level. But just like Monday, yesterday’searly buying quickly turned into profit-taking when it becameapparent $4.00 was beyond bulls’ reach. The June contract finished6.7 cents stronger at $3.814, after trading within a tight,8.5-cent range.

“We saw good spread trading by funds and commercials [Tuesday],”said Sandy Trot, of New York based Trot Trading Corp. “There was alot of buying in June and selling in the out months,” he said.

Despite yesterday’s advance, Trot remains skeptical of themarket’s upside until June can muster the strength to trade backabove Friday’s $3.84 high. “You have to be a little bearish hereuntil prices get back above last week’s highs,” he reasoned.

And while technical factors will continue to have an impact ontrader’s buying and selling decisions, fundamentals remain thecornerstone of the rally that has buoyed prices from January’s$2.125 low. At the heart of those fundamentals is the ever-growingconcern over low storage levels, which have been slow to build overthe past several weeks. Following a string of disappointing storagereports (injections of 32 Bcf, 58 Bcf and 46 Bcf), many marketwatchers are eager to see if the market was able to ratchet uprefills last week. The American Gas Associations will release itsWeekly Storage report shortly after 2:00 P.M. today.

Preliminary expectations for that report are calling for a 60-70Bcf build, which if realized will be the largest injection thus farthis season, but will fall short of both last year’s 73 Bcf figureand the 6-year average of 86 Bcf.

Upon learning that the actual AGA injection estimate (46 Bcf)fell short of expectations (50-70 Bcf) last week, the marketresponded by going on a 24.1 cent tear last Wednesday that was justthe beginning of the buying frenzy that lead prices to a new threeand a half year high at $3.99 Monday.

If the market is able to once again use the AGA data as itsspringboard, Trot targets resistance at the $3.99/$4.00 level aheadof heavier selling at Fibonacci resistance at $4.31. Support on theother hand is seen first at $3.74 and then again at $3.47, he said.

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