Tuesdays and Wednesdays have been quiet lately at the New YorkMercantile Exchange with traders, brokers, and marketers waitingcalmly in anticipation of the weekly AGA storage report. In fact,since the end of April, daily changes to the spot month contract onthose days have been small, averaging slightly more than 3 centswith no change greater than 8 cents. However, this is natural gasand just when you think you have things figured out, it throws youfor a loop. This week, July plummeted on Tuesday to the tune of11.1 cents only to rebound 18.5 cents on Wednesday. That left thespot month at $2.174 at the close of the regular trading sessionWednesday afternoon.

Sources pointed to buying by all segments of the market. “It wasa one-two punch [Wednesday]. Commercials came out as strong buyersand that triggered a number of buy-stops on the way up. Then, oncethe contract broke $2.10, the spec-funds came out in full force andthe rest of us were just along for the ride,” a broker said.

Now that the market has rallied, effectively erasing traders’memories of the downtrend natural gas prices have endured for thelast two months, the big question is whether the market cancontinue to spike. Opinion is mixed and if the market is able tocontinue higher, it will have to do so in the face of yet anotherbearish AGA storage report released Wednesday afternoon. Thatreport, featuring an injection of 104 Bcf, registers at the highend of the 95-105 Bcf range of market expectations and 10 Bcfgreater than last year’s figure. The effect of that refill wasbeing felt immediately in New York as the July contract slipped 5.4cents to $2.12 by 6 P.M. EST in the Wednesday evening Accesssession.

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