Plentiful amounts of gas in underground storage and relativelywarm temperatures once again had bears licking their chopsyesterday. But after two attempts failed to push the market lower,short-covering activity propelled the market higher during the lasthour of trading. December posted a 5.2-cent gain to $2.149 Tuesday,and in doing so, became the first contract since March to post again on its last trading day.

A Houston marketer was quick to point to the oversold conditionthat currently exists in the market as a reason for the late buyingyesterday. “Both locals and commercials have sold this market thewhole way down. What we saw [Tuesday] was a case of peoplelightening their positions a little bit.”

That may have been the case, but a California-based trader wasnot ready to announce the end of the down trend. “What we had todaywas a feeble bounce by a contract that has eroded some 50 cents inthe last two weeks. I am on the sidelines now, and not about to golong quite yet.”

Looking ahead, the weather remains extremely bearish in theshort term. The National Weather Service (NWS) six- to 10-dayforecast released Monday calls for above- and much-above-normaltemperatures for most of the nation for the start of December. Onlythe East Coast will observe normal readings, the NWS said.

However, a New York broker warned that with many traders out ofthe office today, anything is possible.

The Pegasus Econometric Group thinks the market will receive yetanother bearish piece of news this afternoon when the American GasAssociation Storage Report is released. The group expects awithdrawal in the 40-70 range, which would be substantially lessthan the 108 Bcf figure of a year ago.

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.