Fueled by forecasts calling for cooler weather next week,natural gas futures rumbled higher yesterday as traders cashed inon newly established short positions. After opening above keyresistance at $2.36, the January contract moved sideways for mostof the session before erupting higher at the closing bell. TheJanuary contract finished just a fraction of a penny off its dailyhigh, up 8.9 cents to $2.393.

Despite experiencing Chicago’s first November without snow since1885, a Midwest marketer was cautiously bullish following therevised weather forecasts. “This is a start, what we need now isfor [cold weather] to stick around awhile,” he said. According tothe National Weather Service, nearly the entire East Coast fromcentral New England to Florida as well as the eastern Gulf Coaststates will see below-normal mercury readings. The Midwest andSouth Central U.S. will experience normal temperatures and the Westwill stay warm, the NWS said.

However, traders in the Northeast needed to look no further thanoutside their windows Wednesday to know that change was in the air.From New York City to Eastport, ME freezing temperatures and 50 mphwind gusts gave traders a bitter reminder that despite the recordwarmth in November winter is just getting started.

Technicals also came into play yesterday, said Ira Hochman ofNew York-based Trot Trading Corp. “The market was able to bounceoff symmetrical lows put in the last two days. The $2.32 area nowserves as a foundation. If we are able to remain above $2.36, thenthis thing has a decent chance of staging a correction up to$2.57.”

On the other hand, a Houston-based risk manager felt the realtechnical hurdle would come at Tuesday’s high of $2.429. Hisoptimism, however, was waning yesterday afternoon after havingreceived the latest storage data from the American Gas Association.According to the AGA, 5 Bcf was injected into underground storagefacilities last week. And while a small injection was not outsidethe realm of plausibility as it fell in line with last year’s 8 Bcfinjection, it did come as a surprise to market watchers expecting asmall net withdrawal. Last week, the AGA reported a 20 Bcfwithdrawal and the five-year average for this report is a 58 Bcfwithdrawal.

At last look, traders appeared to have sided with the weatherand discounted storage because the January contract was up 5.1cents to $2.444 in last night’s Access trading session.

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