After tumbling 5% on the release of a bearish storage reportWednesday, the natural gas market clawed its way back up yesterdayas locals were forced to cover shorts after watching stubbornsupport in the $3.90s hold yet again. With that buying pressure,the August contract finished 13.5 cents higher at $4.166, recoupingmore than half of Wednesday’s losses.

“We tested support again and it held,” a cash trader noted afterwatching the August contract gain momentum to the upside Thursdayafternoon. “Each time we test $4.00, the buyers come out of thewoodwork.” Following the Wednesday afternoon futures sell-off, cashprices were off considerably from Wednesday morning levelsyesterday. But despite that softness, bulls were still impressed bythe ability of many Gulf Coast trading points to remain above$4.00. One possible explanation for the relative strength, a sourcetold NGI, was buying by storage players looking to take advantageof prices well below first-of-month index levels. Moreover, sometraders are already starting to look ahead at next week’s AGAstorage report, which they feel could reveal another largeinjection figure.

However the market will first need to get through today’spotentially volatile trading session, and Tom Saal of Miami-basedPioneer Futures doesn’t rule out the chance for more advances aheadof the weekend. “We saw good buying by both trade and locals[Thursday]. There is a good chance that the market will continuehigher and try and fill in the chart gap up to $4.41 today,” hepredicted.

And if the market is able to trend higher, it won’t be the firsttime it does so on a lazy Friday afternoon this summer. LastFriday, just as the market appeared content to head into theweekend on a quiet note, it was suddenly boosted 20 cents in asession that saw less than 70,000 contracts change hands.

©Copyright 2000 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.